Alyce Couch v. United States , 694 F.3d 852 ( 2012 )


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  •                               In the
    United States Court of Appeals
    For the Seventh Circuit
    No. 12-1107
    A LYCE C OUCH, independent administrator of
    the estate of Billy Couch, deceased,
    Plaintiff-Appellant,
    v.
    U NITED S TATES OF A MERICA,
    Defendant-Appellee.
    Appeal from the United States District Court
    for the Northern District of Illinois, Eastern Division.
    No. 1:11-cv-02536—George M. Marovich, Judge.
    A RGUED JUNE 7, 2012—D ECIDED S EPTEMBER 5, 2012
    Before M ANION, K ANNE, and H AMILTON, Circuit Judges.
    H AMILTON, Circuit Judge. This case presents a recurring
    issue under the Federal Tort Claims Act and Illinois
    law, and one that has divided federal district courts in
    Illinois. The question is whether a driver employed by
    a private trucking company with a “Highway Contract
    Route” or “HCR” contract with the U.S. Postal Service
    is also a “borrowed employee” of the Postal Service for
    2                                               No. 12-1107
    purposes of the Federal Tort Claims Act and the Illinois
    Workers Compensation Act (IWCA). We conclude that
    the answer is no. The private trucking company does not
    merely “lend employees” to the Postal Service but
    provides mail transportation and delivery services. The
    company trains, equips, pays, and supervises its own
    employees using its own equipment to provide these
    services. We therefore reverse the district court’s grant
    of judgment for the government in this case. Our
    decision is consistent with decisions in many cases in
    which injured persons have sued the Postal Service for
    injuries caused by the negligence of HCR drivers. In
    those cases the Postal Service has successfully argued
    that the HCR drivers are independent contractors
    rather than borrowed employees for whose negligence
    the Postal Service could be held liable.
    I. Factual and Procedural Background
    The relevant facts are undisputed. In 2008, Billy Couch
    was employed as a truck driver by B&B Trucking, a
    private company that has HCR contracts with the
    Postal Service. While Couch was making a delivery to a
    Postal Service facility in Elk Grove, Illinois, a U.S. Postal
    Service employee ran over his foot with a forklift. Two
    years later, Couch died, allegedly as a result of complica-
    tions from the injury. For purposes of this appeal, we
    must assume that the Postal Service employee was negli-
    gent and that the negligence caused Couch’s injury
    and later death.
    B&B Trucking provided its drivers with workers’ com-
    pensation insurance, which covered Couch’s medical
    No. 12-1107                                              3
    expenses. After her husband died, plaintiff Alyce Couch
    brought this action against the United States under the
    Federal Tort Claims Act (FTCA), which provides a cause
    of action for personal injuries negligently caused by
    federal employees acting within the scope of their em-
    ployment. 28 U.S.C. § 1346(b)(1). Under the FTCA, the
    United States is liable to the same extent as a private
    entity under the law of the state where the allegedly
    tortious act occurred — in this case, Illinois. 28 U.S.C.
    § 2674.
    Without addressing the merits, the United States moved
    for summary judgment on the theory that Couch was a
    “borrowed employee” whom the Postal Service had
    borrowed from B&B Trucking. If he was a borrowed
    employee of the Postal Service, then workers’ compensa-
    tion would provide Couch’s only remedy against both
    the borrowing and lending employers, and the tort case
    would have to be dismissed. For reasons we detail
    below, the borrowed employee question here turns on
    the nature and terms of the HCR contract between
    the Postal Service and B&B Trucking.
    Through HCR contracts, the Postal Service has
    outsourced to private companies certain mail delivery
    services that were once performed by its own employ-
    ees. B&B Trucking is one such HCR contractor. B&B
    Trucking also works for FedEx and other private
    carriers, but it derives at least 90 percent of its revenue
    from its contracts with the Postal Service.
    B&B Trucking owns its own delivery trucks for local,
    regional, and long-haul mail transportation. It also
    4                                               No. 12-1107
    screens, hires, trains, supervises, and pays its own drivers
    to transport mail between Postal Service facilities.
    B&B Trucking also employs dispatchers, custodians,
    mechanics, and administrative staff, but the vast
    majority of its 275 employees are drivers. Under an
    HCR contract, B&B Trucking drivers need not wear
    uniforms, but they must display a badge that identifies
    them as a “Non Postal Service Contractor Employee.”
    The Postal Service does not train or manage the
    contractor employees in any way, but it does conduct
    background checks, and the HCR contract bars B&B
    Trucking from employing “any individual who . . . lack[s]
    sufficient ability to perform properly the required
    duties, [is] not a reliable and trustworthy person of good
    moral character,” or is “barred by law or Postal Service
    regulations from performing such duties.” B&B Trucking
    conducts a two- to three-day mandatory general
    training program for its drivers. Drivers communicate
    via their onboard truck computers with B&B Trucking’s
    dispatcher, who in turn radios the Postal Service
    when necessary. The Postal Service requires contractor
    drivers to have cell phones in case the Postal Service or
    the driver needs to “initiate two-way communica-
    tions” directly.
    When bidding for an HCR contract, B&B Trucking
    provides an estimate of the number of employees it
    would require and the associated costs of the transporta-
    tion services. Once the contract is performed, the Postal
    Service reimburses B&B Trucking for those costs. The
    contract at issue in this case was labeled one “For mail
    service,” with the “type of service” described as “Trans-
    No. 12-1107                                              5
    portation.” The contract did not specify the number of
    B&B Trucking drivers required to perform, only the
    number and types of vehicles. About 60 percent of the
    estimated cost was allocated to wages and employee
    benefits. These labor costs included a line-item
    estimate for workers’ compensation insurance, which B&B
    Trucking purchased and for which the Postal Service
    reimbursed it.
    As required under the IWCA, B&B Trucking’s workers’
    compensation insurance paid Couch’s medical bills.
    After Couch died, his widow filed this action against
    the United States for negligence, seeking damages that
    included pain and suffering, lost wages, and loss of
    consortium. After answering, the United States moved
    for summary judgment on the ground that workers’
    compensation provided the exclusive remedy available
    for the decedent’s on-the-job injuries because the Postal
    Service was his borrowing employer for the purposes
    of the IWCA.
    The district court relied on our decisions in Luna v.
    United States, 
    454 F.3d 631
    (7th Cir. 2006), and Belluomini
    v. United States, 
    64 F.3d 299
    (7th Cir. 1995), and framed
    the key issue as follows: whether the Postal Service was
    a borrowing employer depended on whether B&B was a
    “loaning employer” under the IWCA, and that question
    turned on whether “a substantial part of” B&B’s “business
    is . . . furnishing employees to do jobs for govern-
    mental and private” employers. Couch v. United States,
    No. 11 C 2536, 
    2011 WL 6318943
    , at *4-5 (N.D. Ill. Dec. 14,
    2011). The district court said yes, reasoning that because
    its drivers perform work typically done by the Postal
    6                                               No. 12-1107
    Service itself (namely, delivering mail), B&B Trucking
    “furnished” its employees to do the work of the Postal
    Service and other employers. The district court acknowl-
    edged its disagreement with Jorden v. United States, Nos. 09
    C 6814 & 10 C 3144, 
    2011 WL 4808165
    (N.D. Ill. Oct. 11,
    2011), a parallel case in which Judge Feinerman con-
    cluded that the United States was not a borrowing em-
    ployer under the IWCA because HCR contractors
    provide mail delivery services rather than lend employees
    for the Postal Service’s use. This appeal followed.
    II. Discussion
    We review the entry of summary judgment de novo,
    construing all facts and drawing all inferences in the
    light reasonably most favorable to the non-moving party,
    who in this case is Mrs. Couch. See Miller v. Herman,
    
    600 F.3d 726
    , 733 (7th Cir. 2010). Summary judgment
    is appropriate where the evidence before the court indi-
    cates “that there is no genuine issue as to any material
    fact” and that the moving party is entitled to judgment
    as a matter of law. Id.; see Fed. R. Civ. P. 56(c).
    A. The Federal Tort Claims Act and Workers’ Compensation
    The FTCA is a limited waiver of the United States’
    sovereign immunity. Dolan v. U.S. Postal Service, 
    546 U.S. 481
    , 484 (2006). It is the exclusive remedy for any
    tort claim resulting from the negligence of a government
    employee acting within the scope of employment. See 28
    U.S.C. § 2679(b)(1). The key provision of the FTCA
    No. 12-1107                                                  7
    specifies that “the United States shall be liable . . . to tort
    claims in the same manner and to the same extent as
    a private individual under like circumstances.” 28 U.S.C.
    § 2674; United States v. Muniz, 
    374 U.S. 150
    , 153 (1963). In
    Illinois, where the Postal Service’s alleged negligence
    occurred, “the IWCA is the exclusive remedy for
    workers injured on the job; covered employers cannot
    be sued for accidental workplace injuries.” 
    Luna, 454 F.3d at 634
    . This rule reflects the policy trade-off at
    the heart of workers’ compensation: employees recover
    modest compensation for workplace injuries regardless
    of fault; employers are spared the risk of larger damages
    verdicts; and the costs of litigation should be reduced.
    See Lawrence M. Friedman & Jack Ladinsky, Social
    Change and the Law of Industrial Accidents, 67 Colum. L.
    Rev. 50, 69-72 (1967).
    The IWCA addresses the possibility that an employee
    might have more than one employer, such as when an
    employment agency or staffing service hires employees
    and then contracts with other companies who need tempo-
    rary workers. When a covered employer “borrows”
    such an employee from a covered “loaning” employer
    and the employee is injured, both employers are responsi-
    ble for providing workers’ compensation benefits. 820
    ILCS 305/1(a)(4). Absent a contrary agreement, the bor-
    rowing and lending employers are jointly and severally
    liable to the injured employee, 
    id., but as between
    the
    two, the borrowing employer is primarily liable and the
    loaning employer is secondarily liable. Chicago’s Finest
    Workers Co. v. Indus. Comm’n, 
    335 N.E.2d 434
    , 437 (Ill.
    1975). In such cases of borrowed employees, both employ-
    8                                                  No. 12-1107
    ers enjoy immunity from tort liability. See 
    Luna, 454 F.3d at 634
    ; 
    Belluomini, 64 F.3d at 302
    , citing O’Loughlin v.
    ServiceMaster Co., 
    576 N.E.2d 196
    , 201 (Ill. App. 1991).
    Whether an injured worker is a borrowed employee
    is “generally a question of fact,” A. J. Johnson Paving Co. v.
    Indus. Comm’n, 
    412 N.E.2d 477
    , 481 (Ill. 1980), but
    “when the unrebutted evidence is capable of only one
    interpretation,” a court “must make the determination as
    a matter of law.” Kawaguchi v. Gainer, 
    835 N.E.2d 435
    ,
    445 (Ill. App. 2005).
    B. Borrowed Employment under the IWCA
    1. The Common Law “Control” Test
    Drawing on decisions of the Illinois courts, this court
    has articulated two separate tests for identifying a bor-
    rowed employment relationship for purposes of the
    IWCA. One test is based on common law principles of
    the borrowed servant doctrine and respondeat superior,
    and focuses on the degree of control exercised by the
    putative borrowing employer. See 
    Belluomini, 64 F.3d at 302
    ; A. J. Johnson 
    Paving, 412 N.E.2d at 480
    ; cf. Charles v.
    Barrett, 
    135 N.E. 199
    , 200 (N.Y. 1922) (Cardozo, J.) (“Neither
    the contract nor its performance shows a change of control so
    radical as to disturb that duty or its incidence. . . . The rule
    now is that, as long as the employee is furthering the
    business of his general employer by the service rendered
    to another, there will be no inference of a new relation
    unless command has been surrendered, and no inference of
    its surrender from the mere fact of its division.”) (em-
    No. 12-1107                                                  9
    phases added) (citations omitted); see generally J. Dennis
    Hynes, Chaos and the Law of Borrowed Servant: An
    Argument for Consistency, 14 J.L. & Com. 1, 8-18 (1994);
    Note, Borrowed Servants and the Theory of Enterprise
    Liability, 76 Yale L.J. 807, 808-13 (1967). In applying the
    common law test, the Illinois Supreme Court has deemed
    “the most dominant circumstance in identifying the
    employer of a loaned employee to be the right to control
    the manner in which the work is to be done.” A. J. Johnson
    
    Paving, 412 N.E.2d at 480
    . As a matter of sound policy, it
    makes sense to hold the employer in control of the condi-
    tions of employment primarily liable regardless of fault
    because the borrowing employer is now in the best position
    to avoid the risk of workplace accidents. See Note, Bor-
    rowed Servants and the Theory of Enterprise Liability, 76 Yale
    L.J. at 808-13; see generally Guido Calabresi, The Costs of
    Accidents (1970). In applying the common law control
    test, Illinois courts consider “the character of the super-
    vision of the work done, the manner of direction of
    the employee, the right to discharge, the manner of
    hiring, and the mode of payment.” Chaney v. Yetter Mfg.
    Co., 
    734 N.E.2d 1028
    , 1031 (Ill. App. 2000). In this case, both
    parties agree that the Postal Service was not a borrowing
    employer under the common law test because it did not
    exercise control over the manner of Couch’s or his fellow
    B&B Trucking drivers’ work. We turn to the second test.
    2.   The Belluomini Test
    The second test incorporates language from the
    IWCA itself. The statute does not define “borrowing
    10                                                No. 12-1107
    employer” but it provides a non-exclusive definition
    of “loaning employer”:
    An employer whose business or enterprise or a sub-
    stantial part thereof consists of hiring, procuring
    or furnishing employees to or for other employers
    operating under and subject to the provisions of this
    Act for the performance of the work of such other
    employers and who pays such employees their salary
    or wages notwithstanding that they are doing the
    work of such other employers shall be deemed a
    loaning employer within the meaning and provisions
    of this Section.
    820 ILCS 305/1(a)(4). In 
    Belluomini, 64 F.3d at 302
    , we
    reasoned that the customer of a lending employer
    is necessarily a borrowing employer, relying on the
    Illinois Supreme Court’s decision in Chicago’s Finest
    Workers Co. v. Indus. Comm’n, 
    335 N.E.2d 434
    , 436 (1975).1
    1
    The main issue in Chicago’s Finest Workers was how to appor-
    tion liability for workers’ compensation between a borrowing
    employer and a lending employer, not how to identify a
    borrowed employment relationship under the IWCA. In that
    case, the existence of a borrowed employment situation was
    obvious: Chicago’s Finest Workers was a “temp agency” that
    supplied construction workers to a construction contractor
    named Cozzi. Presented with a quintessential borrowed
    employment situation, the state supreme court easily rejected
    Cozzi’s argument that he was not a borrowing employer
    under the common law control test, noting that the “evidence
    clearly establishes the 
    contrary.” 335 N.E.2d at 436
    . It then
    (continued...)
    No. 12-1107                                              11
    We extrapolated from the statutory language a three-
    part test for identifying a borrowing employer: ”(1) a
    substantial portion of the alleged loaning employer’s
    business must consist of furnishing employees to do
    the work of other employers; (2) the loaning employer
    must pay the employee’s wages even though that em-
    ployee is working for another employer; and (3) the
    borrowing employer must be operating under the 
    Act.” 64 F.3d at 302
    ; accord 
    Luna, 454 F.3d at 637
    . The parties
    agree that the second and third factors are present here.
    They dispute the first factor, whether B&B Trucking
    is in the business of “furnishing employees to do the
    work of other employers.”
    Neither Luna nor Belluomini faced the problem we
    have here, which is how to distinguish a “loaning em-
    ployer” from many other contractors who provide
    services to government agencies. In Belluomini, the con-
    tractor supplied Court Security Officers who were
    directed and controlled by the U.S. Marshals Service,
    and the contractor agreed that it simply provided em-
    ployees rather than a 
    service. 64 F.3d at 302-03
    . In Luna,
    the plaintiff worked for a contractor we described as
    (...continued)
    noted, almost as an aside, that the Chicago’s Finest Workers
    agency also met the IWCA’s description of a loaning employer
    at 820 ILCS 305/1(a)(4). 
    Id. The court did
    not identify the
    loaning employer language in paragraph (a)(4) as a separate
    and independent test for identifying a borrowing employer,
    though that is how we read the opinion in Belluomini. 
    See 64 F.3d at 302
    .
    12                                                No. 12-1107
    “in the business of supplying employees to govern-
    mental 
    agencies.” 454 F.3d at 633
    .
    For two reasons, we conclude that B&B Trucking
    is not a “loaning employer” under the terms of the HCR
    contract and the IWCA. First, B&B Trucking does
    not “furnish” its employees to anyone else. Second,
    its employees are not “doing the work of other em-
    ployers” — they are doing the work of B&B Trucking. In
    common parlance, to “furnish” means to “provide or
    supply.” See Webster’s Third New International Dictionary
    923 (1993). B&B Trucking is not providing or supplying
    its drivers to any other employer. It hires drivers and
    other employees to fulfill its service contract with
    the Postal Service to transport mail.
    How do we know the HCR contract is a service con-
    tract? First, it is labeled a contract for “mail service.” That
    helps. Second, the contract refers to B&B Trucking as the
    Postal Service’s “supplier,” and not as a supplier
    of employees or drivers but rather as a supplier of
    the “service” of “transportation.” Third, B&B Trucking
    is required to supply certain numbers and types of vehi-
    cles, but not a certain number and type of drivers. Fourth,
    the contract states that “Driver uniforms are not required,”
    and that “Suppliers who require their drivers to wear
    uniforms may include the cost only in the general overhead
    line.” Fifth, the contract requires B&B Trucking drivers to
    wear a badge labeled “Non Postal Service Contractor
    Employee.”
    At a more fundamental level, we ask what the Postal
    Service is paying B&B Trucking to do. The answer
    No. 12-1107                                            13
    is not merely to furnish a number of skilled drivers to
    show up at Postal Service facilities and do what they
    are told. The answer is that B&B Trucking must actually
    deliver mail from one place to another, safely and on
    time. If B&B Trucking and its employees do not pro-
    vide those services, B&B Trucking does not get paid.
    In sum, the contract terms indicate that it is one to
    provide transportation services rather than drivers, that
    B&B Trucking may perform those services using
    however many drivers it wishes, and that the
    Postal Service disclaims those drivers as its own. B&B
    Trucking does not supply employees, it provides services.
    The second reason B&B Trucking is not a loaning em-
    ployer under the IWCA is that its drivers do not
    perform the work of the Postal Service, except in the very
    general sense that it is work the Postal Service hired
    their employer to do. A business or government agency
    may contract with other companies to provide a variety
    of services that could be done by in-house employees
    or that could be contracted out, such as catering meals,
    painting, management consulting, legal representation,
    or security or custodial services.
    Let’s focus on a contract for legal representation of a
    business or agency that employs its own in-house at-
    torneys, but decides to hire an outside law firm
    (not a legal temporary employment agency) to handle
    certain types of cases or transactions. Like the Postal
    Service in this case, the business or agency could have
    its own lawyer-employees do the work instead. No one
    would suggest, though, that the law firm is merely
    14                                              No. 12-1107
    “furnishing employees” to its client or that the em-
    ployees of the law firm assigned to the client are also
    employees of the client. The same reasoning
    would apply to the management consultants, the security
    service, the catering service, the custodial service, or
    many others, and it applies to B&B Trucking’s mail trans-
    portation service for the Postal Service. To perform
    those services, B&B Trucking’s drivers are trained by
    B&B, use B&B trucks, communicate with B&B dis-
    patchers, are supervised by B&B management, and per-
    form the tasks that B&B requires for so long and for
    such compensation as B&B determines. These drivers
    are quite clearly doing the work of B&B Trucking
    in providing services to the Postal Service.
    This reasoning should be familiar to the Postal Service.
    Drivers transporting mail under HCR contracts and
    other similar contracts cause accidents from time to
    time. When victims of such accidents sue the Postal
    Service under the FTCA, the Postal Service uses this same
    reasoning to show that these drivers are not its own
    employees but independent contractors for whom it
    bears no legal responsibility. See, e.g., Hines v. United
    States, 
    60 F.3d 1442
    , 1446 (9th Cir. 1995) (affirming sum-
    mary judgment for United States in FTCA action
    against Postal Service for negligence of driver operating
    under mail transportation services contract; transport
    company was independent contractor), abrogated on
    other grounds by United States v. Olson, 
    546 U.S. 43
    (2005);
    Norton v. Murphy, 
    661 F.2d 882
    , 885 (10th Cir. 1981) (same);
    Tunder v. United States, 
    522 F.2d 913
    , 915 (10th Cir. 1975)
    (same); Fisher v. United States, 
    356 F.2d 706
    , 708 (6th Cir.
    No. 12-1107                                                 15
    1966) (per curiam) (same); Lerma v. United States,
    
    716 F. Supp. 1294
    , 1297 (N.D. Cal. 1988) (same); Duncan
    v. United States, 
    562 F. Supp. 96
    , 100 (E.D. La. 1983) (same);
    Thomas v. United States, 
    204 F. Supp. 896
    , 899 (D. Vt. 1962)
    (same); cf. Kwitek v. U.S. Postal Service, 
    694 F. Supp. 2d 219
    ,
    224-25 (W.D.N.Y. 2010) (in FTCA negligence action
    brought by HCR contractor’s employee against Postal
    Service, holding that the FTCA independent contractor
    exception did not bar claim because plaintiff alleged
    negligence by Postal Service employees, and denying
    government’s motion to dismiss).
    As the government would have it, though, HCR
    drivers are independent contractors when they injure other
    people but borrowed employees when Postal Service
    employees injure them, at least in Illinois. This “heads-I-
    win, tails-you-lose” approach is both unfair and doc-
    trinally incoherent. If the drivers are independent con-
    tractors, they cannot be borrowed employees — at least
    not at common law — because they are not under the
    Postal Service’s control. See, e.g., Logue v. United States,
    
    412 U.S. 521
    , 527-28 (1973) (“the critical factor in
    making this [independent contractor] determination is
    the authority of the principal to control the detailed
    physical performance of the contractor”); 
    Belluomini, 64 F.3d at 304
    (“The determination of whether a rela-
    tionship is that of an independent contractor or em-
    ployer/employee is fact-dependent. Among the factors
    which we consider are the manner of hiring, the right
    to discharge, the degree of supervision, and most im-
    portantly, the right to control and direct the work done.”)
    (citation omitted); see also Restatement (Second) of
    16                                              No. 12-1107
    Agency, § 220(2) (“In determining whether one acting
    for another is a servant or an independent contractor,
    the following matters of fact, among others, are considered:
    (a) the extent of control which, by the agreement, the
    master may exercise over the details of the work. . . .”).
    The only reason the Postal Service’s position in this case
    is even colorable, of course, is that unlike the common-
    law control test, under the Belluomini test the borrowing
    employer need not exercise full common law control
    over the borrowed employee so long as the loaning em-
    ployer is in the business of “furnishing employees” to
    other employers.
    Under our precedents applying Illinois law, however,
    this phrase — “furnishing employees to do the work of
    other employers” — does not apply to a contractor that
    is responsible for providing a service with employees
    under its own control. In Belluomini itself, we con-
    cluded that the U.S. Marshals Service was the borrowing
    employer of a Court Security Officer (CSO) who was killed
    in the line of duty. The Marshals Service “hired” the
    contractor (called GSSC) that hired the CSO “to supply
    [CSOs] to assist in the protection of the federal judiciary,”
    and we said the contractor was in the business of “supply-
    ing security personnel to the 
    government.” 64 F.3d at 302
    ,
    303. In rejecting the plaintiff’s independent contractor
    argument, we emphasized the degree of control exercised
    by the Marshals Service over the day-to-day work of the
    CSOs:
    [I]t is the Marshals Service which has the responsi-
    bility for determining how security is provided in
    No. 12-1107                                            17
    the federal building. This includes the authority to
    assign duties and stations to individual CSOs. Al-
    though GSSC provides a “Lead CSO” for on-site
    supervision, that officer essentially functions as a
    liaison between the CSOs and the Marshals Service.
    The Marshals Service trains and deputizes new
    CSOs and provides them with their badges and their
    weapons. GSSC cannot reduce or increase the num-
    ber of CSOs on site without the Marshals Service’s
    approval. The Marshals Service also retains the author-
    ity to discharge CSOs. These factors combine to under-
    mine any claim that GSSC and the Marshals
    Service had a principal/independent contractor rela-
    tionship.
    
    Id. at 304. Belluomini
    thus determined that CSOs were not
    independent contractors because the Marshals Service
    controlled so much of their daily work. That degree of
    control distinguished the furnishing of employees from
    the businesses of many other government contractors
    who provide services, and whose employees are not
    “borrowed employees.”
    More recently, in Luna v. United States, 
    454 F.3d 631
    (7th Cir. 2006), we applied the Belluomini test in a
    similar context. Plaintiff Luna worked for a consulting
    company called RCI that provided employees to the
    Navy to assist with its training courses at the Great
    18                                                   No. 12-1107
    Lakes Naval Base in Illinois.2 While addressing a large
    group of recruits, Luna fell and injured her knee. 
    Id. at 633. She
    received workers’ compensation benefits
    through RCI’s policy in accordance with the IWCA and
    then sued the United States for negligence in con-
    structing and maintaining the training facility. This
    court held that she could not sue under the FTCA. We
    determined that “RCI easily satisfies the test for a
    loaning employer” because it was “undisputed that
    a substantial part of its business involved hiring, pro-
    curing, or furnishing employees to do jobs for govern-
    mental and private agencies.” 
    Id. at 637. This
    made
    the Navy a borrowing employee under the Belluomini
    test, so workers’ compensation was Luna’s exclusive
    remedy.
    Thus, in both Luna and Belluomini, a private company
    provided personnel to work at federal agencies under the
    direction of government staff. In Luna, the plaintiff was an
    administrative assistant who acted as a liaison between
    Navy instructors and Navy recruits. See Luna v. United
    States, 
    2003 WL 21196227
    , at *5. In Belluomini, the CSOs
    2
    According to the district court’s opinion, the Navy did not
    exercise formal control over RCI employees, but did supervise
    their work to some degree and also provided “RCI with
    office space and facilities, parking spaces, telephone services,
    utilities, office supplies, computer equipment, computer
    software, four government vehicles, and other equipment.” Luna
    v. United States, No. 00 C 1329, 
    2003 WL 21196227
    , at *4 (N.D. Ill.
    May 21, 2003).
    No. 12-1107                                              19
    assisted the Marshals Service in providing security at
    federal courthouses. In each case, the government con-
    tracted with a private employer for agency support
    personnel, and the agency integrated the contractor’s
    employees into its own operations. See Luna, 
    2003 WL 21196227
    , at *6 (“Naval personnel did have the right to tell
    Plaintiff how to do her job. For example, Naval personnel
    could order Plaintiff to change her work location, tell
    her to use different procedures in carrying out her
    duties, or instruct her to give students different infor-
    mation.”) (record citation omitted); see also 
    Belluomini, 64 F.3d at 304
    (“[I]t is the Marshals Service which
    has the responsibility for determining how security
    is provided in the federal building. This includes the
    authority to assign duties and stations to individual
    CSOs.”).
    Here, by contrast, B&B Trucking contracted with the
    Post Office to provide not employees but a discrete
    service. B&B managed its own operation, deployed its
    own equipment, and trained, coordinated, and supervised
    its own employees in performing that service. To say
    that B&B is in the business of “furnishing employees to
    do the work of other employers” would expand that
    phrase well beyond both common usage and the
    factual bounds envisaged by Belluomini and Luna, and
    would open up the possibility that all sorts of service
    contracts could be deemed borrowed employment. It
    would also unmoor the doctrine of borrowed employ-
    ment from its settled common law meaning — a meaning
    we presume the Illinois legislature incorporated into
    20                                              No. 12-1107
    the IWCA. See Morissette v. United States, 
    342 U.S. 246
    ,
    263 (1952) (“And where Congress borrows terms of art
    in which are accumulated the legal tradition and
    meaning of centuries of practice, it presumably knows
    and adopts the cluster of ideas that were attached to
    each borrowed word in the body of learning from which
    it was taken and the meaning its use will convey to
    the judicial mind unless otherwise instructed. In such
    case, absence of contrary direction may be taken as satis-
    faction with widely accepted definitions, not as a
    departure from them.”). As Judge Feinerman concluded
    in a case with materially identical facts, “the sum-
    mary judgment record here, viewed with all genuine
    factual disputes resolved in [the plaintiff’s favor],
    indicates that [the HCR contractor] was in the business
    of furnishing inter-post office transportation services,
    not employees, to the Postal Service.” Jorden, 
    2011 WL 4808165
    , at *3. We agree. The result should be the
    same here.
    We noted in Luna that several decisions of the Illinois
    Appellate Court have determined that “there is no
    separate statutory test for a borrowing employer under
    the IWCA, and that the issue of borrowed employment
    is a question of fact to be resolved solely by application
    of the multi-factor ‘control test.’ ” 
    Luna, 454 F.3d at 636
    ,
    citing Lanphier v. Gilster-Mary Lee Corp., 
    765 N.E.2d 493
    , 495-96 (Ill. App. 2002); 
    Chaney, 734 N.E.2d at 1032
    ;
    Crespo v. Weber Stephen Prods. Co., 
    656 N.E.2d 154
    , 156
    (Ill. App. 1995). This may have been an understatement:
    at least a dozen other decisions of the Illinois Appellate
    No. 12-1107                                              21
    Court have treated the common law right-to-control
    inquiry as the only relevant one under the IWCA,
    without hinting at a separate test based on the definition
    of loaning employer found in 820 ILCS 305/1(a)(4).
    See, e.g., Prodanic v. Grossinger City Autocorp, Inc., ___
    N.E.2d ___, 
    2012 WL 2947894
    , at *8 (Ill. App. 2012);
    
    Kawaguchi, 835 N.E.2d at 442-43
    ; Palomar v. Metro. Sanitary
    Dist. of Greater Chicago, 
    587 N.E.2d 1067
    , 1072 (Ill.
    App. 1992). Most of these courts relied on the
    Illinois Supreme Court’s two most recent decisions on
    point, both of which indicate that the common law
    control test is the exclusive standard of borrowed em-
    ployment for the purposes of the IWCA. See A. J. Johnson
    Paving Co. v. Indus. Comm’n, 
    412 N.E.2d 477
    , 480 (Ill. 1980)
    (“An employee in the general employment of one
    person may be loaned to another for the performance
    of special work and become the employee of the person
    to whom he is loaned, while performing the special
    service. Whether such a transfer of employment occurs
    depends on whether the special or borrowing employer
    has the right to control the employee with respect to
    the work performed.”); Saldana v. Wirtz Cartage Co., 
    385 N.E.2d 664
    , 668 (Ill. 1978) (“The main criterion for deter-
    mining when a worker becomes a loaned employee
    is whether the special employer has control of the em-
    ployee’s services.”). Although these decisions came
    after Chicago’s Finest Workers, we did not consider them
    in either Belluomini or Luna. Moreover, no reported deci-
    sion of an Illinois state court has ever cited Belluomini
    or Luna. We have located just two reported cases
    22                                                  No. 12-1107
    that endorse anything resembling the Belluomini test,
    and neither is good authority on this point of law.3
    We need not reconsider the Belluomini test today,
    for neither Belluomini nor Luna suggested that the
    statutory definition of loaning employer might in-
    clude government contractors like B&B Trucking that
    provide services rather than employees. As these cases
    show, the statutory definition of a loaning employer
    is most useful to ensure that temporary employment
    agencies and similar businesses are recognized as em-
    ployers under the IWCA: “An employer whose business
    or enterprise or a substantial part thereof consists of
    hiring, procuring or furnishing employees to or for
    other employers operating under and subject to the
    provisions of this Act for the performance of the work of
    such other employers and who pays such employees their
    salary or wages notwithstanding that they are doing the
    work of such other employers . . . .” 820 ILCS 305/1(a)(4).
    This definition does not sweep so broadly as to reach
    outside contractors like B&B Trucking who provide
    services to their customers using the contractors’ own
    3
    The first case, Wasielewski v. Havi Corp., 
    544 N.E.2d 116
    , 117
    (Ill. App. 1989), was expressly overruled on precisely these
    grounds. See 
    Lanphier, 765 N.E.2d at 496
    . The second case, Evans
    v. Abbott Prods., Inc., 
    502 N.E.2d 341
    , 343 (Ill. App. 1986),
    assumed in dicta that such a test existed, but the same
    appellate district has rejected its assumption in later cases.
    See, e.g., Prodanic, ___ N.E.2d at __, 
    2012 WL 2947894
    , at *8
    (“section 1(a)(4) does not define a borrowing employer”).
    No. 12-1107                                         23
    employees under the direction and control of the con-
    tractors’ management and using their own equipment.
    Conclusion
    B&B Trucking did not meet the statutory definition of
    a loaning employer, so Mr. Couch was not a borrowed
    employee of the Postal Service when he was hurt.
    The judgment of the District Court is R EVERSED and
    the case is R EMANDED for proceedings consistent with
    this opinion.
    9-5-12
    

Document Info

Docket Number: 12-1107

Citation Numbers: 694 F.3d 852, 2012 WL 3990695, 2012 U.S. App. LEXIS 18643

Judges: Manion, Kanne, Hamilton

Filed Date: 9/5/2012

Precedential Status: Precedential

Modified Date: 11/5/2024

Authorities (27)

Wasielewski v. Havi Corp. , 188 Ill. App. 3d 340 ( 1989 )

Palomar v. Metropolitan Sanitary District of Greater Chicago , 225 Ill. App. 3d 182 ( 1992 )

Lanphier v. Gilster-Mary Lee Corp. , 327 Ill. App. 3d 801 ( 2002 )

United States v. Muniz , 83 S. Ct. 1850 ( 1963 )

Lerma v. United States , 716 F. Supp. 1294 ( 1988 )

Kwitek v. United States Postal Service , 694 F. Supp. 2d 219 ( 2010 )

O'Loughlin v. Servicemaster Co. Limited Partnership , 216 Ill. App. 3d 27 ( 1991 )

Claire Irene Fisher, Administratrix of the Estate of Virgil ... , 356 F.2d 706 ( 1966 )

Mildred A. Belluomini, Individually and as Independent of ... , 64 F.3d 299 ( 1995 )

Saldana v. Wirtz Cartage Co. , 74 Ill. 2d 379 ( 1978 )

Dolan v. United States Postal Service , 126 S. Ct. 1252 ( 2006 )

Logue v. United States , 93 S. Ct. 2215 ( 1973 )

United States v. Olson , 126 S. Ct. 510 ( 2005 )

Duncan v. United States , 562 F. Supp. 96 ( 1983 )

Kevin HINES; Cathy Zampa, as Guardian Ad Litem for ... , 60 F.3d 1442 ( 1995 )

Evans v. Abbott Products, Inc. , 150 Ill. App. 3d 845 ( 1986 )

Irving L. Norton, A/K/A I. L. Norton, and Dana Norton v. ... , 661 F.2d 882 ( 1981 )

Roger B. Tunder and Juneva B. Tunder v. United States of ... , 522 F.2d 913 ( 1975 )

A. J. Johnson Paving Co. v. Industrial Commission , 82 Ill. 2d 341 ( 1980 )

Chicago's Finest Workers Co. v. Industrial Commission , 61 Ill. 2d 340 ( 1975 )

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