Kidder v. Miller-Davis Co.

Mallett, C.J.

We granted leave in these consolidated labor broker cases to determine whether defendant Miller-Davis is a coemployer of the plaintiffs and thus immune from tort liability under the exclusive remedy provision of the Worker’s Disability Compensation Act. In both cases the Court of Appeals affirmed grants of summary disposition in favor of the defendants, holding that the defendant was a customer of Construction Labor Services (cls), a labor broker, and as such was protected from suit under the exclusive remedy provision of the wdca. We affirm and hold further that under the economic-reality test defendant was also the plaintiffs’ employer for purposes of the exclusive remedy provision of the WDCA.

I

The two cases are almost factually indistinguishable. Both Mr. Kidder and Mr. Wolthuis, plaintiffs in their respective cases, were injured on construction sites at which the defendant was the general contractor. Both men were employees of cls. Cls is a labor broker in the business of providing “leased services of construction trades personnel on an independent contractor basis” to construction contractors. Both Mr. Kidder and Mr. Wolthuis were leased construction trades personnel furnished to Miller-Davis by CLS. The lease agreements between CLS and Miller-Davis, covering both employees, are identical.

A

Plaintiff Wolthuis, leased to Miller-Davis through CLS, was performing demolition work on a multimillion dollar construction project in Kalamazoo when he was impaled through the neck by a piece of jagged reinforcement steel protruding from a block of concrete being hoisted by defendant’s crane at the work site. He was subsequently burned by an acetylene torch that fell on him after he was impaled. Plaintiff alleged in his complaint that defendant was negligent in failing to provide a safe workplace and negligent in the operation of the crane. Just before trial, the court entertained and granted the defendant’s motion for summary disposition, holding that Miller-Davis was a coemployer and immune from liability under the exclusive remedy provision of the WDCA.¹

In the Court of Appeals, plaintiff argued that Miller-Davis was not a coemployer, that, in the alternative, the court erred in granting the motion because more than a single inference could be drawn from the facts, and that the issue should have been decided by a jury. In addition the plaintiff asserted that Miller-Davis was estopped from asserting that it was an employer by virtue of the express language in the contract. The Court of Appeals rejected these arguments. The majority held that only one conclusion could be drawn from the facts: defendant was a customer of cls, a labor broker, and as such was entitled to the exclusive remedy of the wdca. Unpublished opinion per curiam, issued February 23, 1995 (Docket No. 168754), citing Howard v Dundee Mfg Co, 196 Mich App 38, 40; 492 NW2d 478 (1992); Farrell v Dearborn Mfg Co, 416 Mich 267; 330 NW2d 397 (1982); Renfroe v Higgins Rack Coating & Mfg Co, Inc, 17 Mich App 259; 169 NW2d 326 (1969). With regard to the contract between CLS and Miller-Davis, the Court stated, “[w]e also find no merit to plaintiffs’ estoppel argument on these facts because courts will look beyond the labels placed on relationships in applying the wdca.” Id., citing Fitzgerald v Mobil Oil Corp, 827 F Supp 1301 (ED Mich, 1993).

1 The statute provides in pertinent part: “The right to the recovery of benefits as provided in this act shall be the employee’s exclusive remedy against the employer . . . .” MCL 418.131(1); MSA 17.237(131)(1). The only exception to the exclusive remedy provision is an intentional tort, which has not been alleged in these cases. Id.