Monte M. Thompson v. Ati Products, Inc. ( 2015 )

IN THE COURT OF APPEALS OF IOWA
No. 14-1765
Filed August 19, 2015
MONTE M. THOMPSON,
Plaintiff-Appellant,
vs.
ATI PRODUCTS, INC.,
Defendant-Appellee.
________________________________________________________________
Appeal from the Iowa District Court for Sioux County, James. D. Scott,
Judge.
Plaintiff appeals from the district court’s grant of the defendant’s motion for
summary judgment. REVERSED AND REMANDED.
David A. Scott of Cornwall, Avery, Bjornstad, Scott & Davis, Spencer, for
appellant.
Michael J. Frey of Hellige, Frey & Roe, R.L.L.P., Sioux City, for appellee.
Considered by Tabor, P.J., and Bower and McDonald, JJ.
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MCDONALD, J.
Monte Thompson was employed by Aventure Staffing and Professional
Services, LLC. Aventure is a labor broker that, among other things, assigns its
employees to perform work on a temporary basis for its customers. Thompson
was one such employee. On July 29, 2010, Thompson was seriously injured on
his first day of work at A & I Products, the corporate predecessor of ATI Products
(hereinafter “ATI”). Thompson had been placed at ATI’s facility by Aventure.
Thompson filed a claim for and received workers’ compensation benefits through
Aventure. He filed this suit against ATI for negligence arising out of the
workplace injury. ATI moved for summary judgment on the grounds it was
Thompson’s “special employer” as a matter of law and Thompson’s negligence
claim was thus barred by the exclusive remedy provision in the workers’
compensation code. See Iowa Code § 85.20 (2013). The district court
determined “[n]o genuine dispute of material fact remains that [Thompson] and
[ATI] had entered into an implied contract of employment at the time of
[Thompson’s] injury.” The district court granted ATI’s motion for summary
judgment. Thompson timely filed this appeal.
I.
We review a district court’s grant of summary judgment for corrections of
errors at law. See Iowa R. App. P. 6.907; Boelman v. Grinnell Mut. Reins. Co.,
826 N.W.2d 494, 500 (Iowa 2013). A district court “properly grants summary
judgment when the moving party demonstrates there is no genuine issue of
material fact and that [the moving party] is entitled to judgment as a matter of
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law.” Boelman, 826 N.W.2d at 501. “[W]e examine the record in the light most
favorable to the nonmoving party. We afford the nonmoving party every
legitimate inference that can be reasonably deduced from the evidence, and if
reasonable minds can differ on how the issue should be resolved, a fact question
is generated” and summary judgment is not proper. Id. (citations and internal
quotation marks omitted). An inference is legitimate if it is “rational, reasonable,
and otherwise permissible under the governing substantive law.” See Phillips v.
Covenant Clinic, 625 N.W.2d 714, 718 (Iowa 2001). An inference is not
legitimate, however, if it is based on speculation or conjecture. See id.
II.
Iowa’s workers’ compensation scheme provides “the exclusive and only
rights and remedies of the employee” arising out of a work-related injury “against
the employee’s employer.” Iowa Code § 85.20. An employee is precluded from
maintaining “any other action other than workers’ compensation against the
employer . . . for injury arising while the employee is acting in the course of his
employment.” Jones v. Sheller-Globe Corp., 487 N.W.2d 88, 90 (Iowa Ct. App.
1992). Section 85.61(11) defines “worker” or “employee” to include “a person
who . . . works under contract of service, express or implied . . . for an employer.”
“[A]n employee may have more than one employer.” Caterpillar Tractor
Co. v. Shook, 313 N.W.2d 503, 506 (Iowa 1981). “[T]he threshold determination
in deciding whether a worker falls into the workers’ compensation scheme is
whether the worker entered into a contract of hire, express or implied.” Parson v.
Procter & Gamble Mfg. Co., 514 N.W.2d 891, 893 (Iowa 1994). “The question of
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whether a contract of hire exists is ordinarily one of fact,” and “in cases involving
the question of whether an employee of a general employer became the
employee of a special employer, the presumption is that the general employer
continues as the sole employer.” Id. at 893-94. Our supreme court has treated
the employer-employee relationship question as one of contract law and stated
“[t]he overriding issue is the intention of the parties.” Shook, 313 N.W.2d at 505.
Our supreme court has also discussed five non-exclusive factors that may serve
as an aid in determining whether an employment relationship exists: (1) the right
of selection, or to employ at will, (2) responsibility for payment of wages by the
employer, (3) the right to discharge or terminate the relationship, (4) the right to
control the work, and (5) identity of the employer as the authority in charge of the
work or for whose benefit it is performed. See id.; Henderson v. Jennie
Edmundson Hosp., 178 N.W.2d 429, 431 (Iowa 1970). However, where, as
here, the question arises in the context of a borrowed servant situation, the
primary focus remains the intent of the parties:
[W]hen the question concerning the nature of the employment
relationship arises in the context of a borrowed servant situation,
the primary focus is on the intent of the parties; if the five factors
are considered at all, it is merely as an aid in determining whether
there is a contract of employment between the employee and the
second employer. See, e.g., Parson, 514 N.W.2d at 895–97;
Rouse v. State, 369 N.W.2d 811, 814 (Iowa 1985); Shook, 313
N.W.2d at 505.
Iowa Mut. Ins. Co. v. McCarthy, 572 N.W.2d 537, 542 (Iowa 1997) (emphasis
added).
With those principles in mind, we directly address the question presented.
The limited issue before the court is whether the district court erred in concluding
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summary judgment record established ATI and Thompson had an employer-
employee relationship as a matter of law. Stated differently, when viewing the
summary judgment record in the light most favorable to Thompson, including
every reasonable inference to be drawn from that record, could a reasonable
juror find Thompson was the exclusive employee of Aventure and not a special
employee of ATI. See Boelman, 826 N.W.2d at 501; Goodpastor, 849 N.W.2d at
6. Based on the controlling Parson decision, we conclude that a reasonable juror
could so find and that the district court erred in granting the defendant’s motion
for summary judgment.
“In Iowa, a contract will be implied where there has been a mutual
manifestation of assent by acts and deeds (rather than words) to the same terms
of an agreement.” Swanson v. White Consol. Inds., Inc., 30 F.3d 971, 974 (8th
Cir. 1994) (citation omitted). “The substance of such a contract must be
determined from the acts of the parties in light of the subject matter and the
surrounding circumstances.” Id. We consider the alleged special employer’s
intent to enter into an employment relationship as well as evidence of the alleged
employee’s consent to an employment relationship. See Parson, 514 N.W.2d at
894-95.
One relevant inquiry includes the legal relationship between the labor
broker and its customer. See id. at 899 (explaining the contract between the
broker and customer could evidence the customer’s intent to not enter into an
employment relationship with the employee). The language in the contract
between Aventure and ATI supports an inference that Thompson remained
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exclusively an Aventure employee even while performing work at ATI’s facility.
The Aventure terms and conditions of service with ATI included this provision:
CUSTOMER acknowledges that Aventure[’s] . . . ability to provide
staffing service to CUSTOMER requires a substantial capital
investment by Aventure . . . to test, train, and maintain a large staff
of personnel. CUSTOMER further acknowledges that any
employee whose name appears on a timecard submitted to
Aventure . . . is the employee of Aventure . . . and that if the
CUSTOMER were to hire said employee directly, Aventure . . .
would incur substantial loss. CUSTOMER agrees that in the event
CUSTOMER . . . hires said employee prior to the employee’s
completing 520 hours on the current assignment of the employee
by Aventure . . . to CUSTOMER, CUSTOMER will pay, in addition
to the charges for time shown on the current timecard plus all prior
invoices a surcharge of (to be determined).
(Emphasis added.)
The division of responsibility between Aventure and ATI with respect to
the employee’s compensation and benefits also supports an inference that
Thompson was exclusively an employee of Aventure. See Parson, 514 N.W.2d
at 894-95. Aventure administered the payroll function. Time cards were
submitted to Aventure and not ATI. Aventure paid all compensation owed its
employees. Aventure performed all required federal and state tax withholding.
Aventure paid the workers’ compensation insurance. Aventure provided
temporary insurance options to its employees. Thompson was not eligible to
receive health insurance or retirement benefits through ATI.
In considering the nature of the relationship between the labor broker, the
customer, and the employee at issue, we should also consider the documents
between the employee and the labor broker. Those documents would bear on
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the employee’s intent. Thompson signed a release of workers’ compensation
claims with Aventure:
I understand that [Aventure] provides temporary workers for
its customers to work at the customers’ project site. In accepting
any work assignment, I acknowledge that I am a temporary
employee of [Aventure] and am not an employee of [Aventure’s]
customer.
If I am ever injured in the course of my work for [Aventure], I
agree that I will look only to [Aventure’s] Workers’ Compensation
coverage and not [Aventure’s] customer for any recovery of
workers’ compensation benefits. . . . I waive, release, and forever
discharge any workers’ compensation claim that I may not have or
that may later accrue against any customer of [Aventure] which
directly or indirectly arises out of any . . . injuries caused by the
actions or inactions of [Aventure’s] customer which may occur to
me while on a temporary work assignment for [Aventure].
The Aventure policies and procedures checklist provides:
I understand that I am an employee of Aventure . . . and only
I or Aventure . . . can terminate my employment. When an
assignment ends I must report to the Aventure . . . office for my
next job assignment.
If for some unexpected reason, such as an emergency or
illness, I cannot make it to work or will be late, I will contact
Aventure . . . two hour prior to start time so you can call the client
and/or find a replacement.
If I sustain an injury on the job, I will inform the client and
Aventure . . . immediately after the accident. Aventure . . . will
coordinate with the client and myself to proper procedure for
treatment and reporting the accident.
(Emphasis added.) The Temporary Benefits Acknowledgement form provides “in
consideration of my assignment by Aventure Staffing & Professional Services,
LLC (‘Employer’) at the Client Company, I agree that I am solely an employee of
Employer for benefit plan purposes, and that I am eligible only for such benefits
as Employer may offer to me as its employee.” In sum, when viewed in the light
most favorable to Thompson, the documents defining the relationship between
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Aventure, ATI, and Thompson all support an inference that Thompson was
exclusively an employee of Aventure and not ATI.
There is little in the summary judgment record regarding the issue of
whether ATI and Thompson had an implied contract of employment despite the
employment documents tending to show to the contrary. In considering
Thompson’s intent to enter into an employment relationship with ATI, we may
consider Thompson’s testimony and his understanding of his relationship with
Aventure and ATI. See id. at 895. At the time Thompson applied at Aventure, he
was incarcerated at the residential treatment facility (“RTF”) in Sheldon, Iowa.
He applied at Aventure because it was one of the few places the RTF allowed
inmates to work. After his release from the RTF he planned to return to previous
employers such as Midstate Builders or Morton Buildings or to return to being
self-employed. He did not plan on continuing to work for Aventure after his
release. When Thompson was assigned on a temporary basis by Aventure to
work at ATI, he “considered [himself] to be employed by Aventure not [ATI],
where [he] was merely a temporary worker.”
Thompson and employees of ATI had very little contact due to the timing
of the injury. Thompson suffered a devastating injury on the first morning he
reported to the ATI job site. There is little evidence regarding any communication
between Thompson and ATI. Thompson did not sign any documents provided
by ATI. There is little evidence regarding the historical practice between
Thompson and ATI that might shed light on this situation. The summary
judgment record does show that Aventure employees, generally, worked under
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the direction of the defendant’s supervisors and at the defendant’s supervisors’
direction and control. The summary judgment record also shows that Aventure
employees at ATI’s job site, generally, were not treated differently than ATI’s
employees with respect to work and work conditions.
ATI argues the “overwhelming majority of jurisdictions have determined
customers of labor brokers/temporary employers are protected by the state’s
workers’ compensation act from common law tort liability” and cites more than
thirty decisions from jurisdictions around the country as support for that
argument. That is all well and good, but the weight of persuasive authority does
not allow us to disregard controlling authority. The Parson decision provides that
the question presented typically is one of fact. On the summary judgment record
in this case, in light of Parson, we conclude reasonable minds could differ on the
question whether Thompson and ATI both had the intent to enter into an
employment relationship. See Goodpastor v. Schwan’s Home Serv., Inc. 849
N.W.2d 1, 6 (Iowa 2014) (“Even if facts are undisputed, summary judgment is not
proper if reasonable minds could draw from them different inferences and reach
different conclusions.”). Accordingly, the district court erred in determining the
existence of an implied contract as a matter of law and in granting summary
judgment for ATI. See Parson, 514 N.W.2d at 894 (“Because the determination
of the employment status of a workers’ compensation claimant by the Industrial
Commissioner is one of fact, we do not see why a similar determination by the
district court becomes one of law.”); Velazquez v. Hydro Conduit Corp, No. 05-
0603, 2006 WL 469351, at *3 (Iowa Ct. App. Mar. 1, 2006) (reversing summary
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judgment for alleged special employer under similar facts where agreement
stated the broker’s employee shall not be considered the customer’s employees).
III.
For the foregoing reasons, we reverse the district court’s grant of
summary judgment and remand this case for further proceedings.
REVERSED AND REMANDED.