On January 9, 2018, District III of the Wisconsin Court of Appeals held that temporary workers who are injured while working for their host employers have the right to elect either to claim workers’ compensation benefits or to sue their host employers in tort. The decision turns on its head the Wisconsin Worker’s Compensation Act’s exclusive remedy provision, exposes thousands of employers in Wisconsin to tort liability that they previously did not have or anticipate having, and threatens general liability insurance carriers with risks they never anticipated accepting or priced their premiums to take into account. In Re the Estate of Carolos Esterley Cerrato Rivera v. West Bend Mutual Insurance Company, No. 2017AP142.

Factual Background

Alex Drywall employed Carlos Rivera and provided him as a temporary, skilled worker to Alpine Insulation. An Alpine-owned vehicle in which Rivera was traveling from one Alpine job site to another was involved in a single-vehicle accident. Rivera was killed in the accident. The driver, an employee of Alpine, was found negligent in his operation of the vehicle.

Rivera’s estate did not make a claim for death benefits under the Wisconsin Worker’s Compensation Act but instead filed a wrongful death action against Alpine and its insurance carrier, seeking damages for the pain and suffering experienced by Rivera’s children as a result of their loss of his “society, companionship, and support.” Alpine and the insurance carrier successfully moved for summary judgment before the trial court, and the estate appealed.

The Appellate Court’s Analysis

The Wisconsin Court of Appeals held that a literal reading of the Wisconsin Worker’s Compensation Act requires the conclusion that a temporary worker “who makes a claim for compensation” may not sue the employer who hosted him or her in tort, but that the temporary worker may opt not to make a workers’ compensation claim and instead bring a tort claim against the host employer. A contrary holding, the court concluded, would require the court either to read words into the statute or to ignore the phrase “who makes a claim for compensation.” 

The court’s decision ironically grants to temporary workers who work alongside regular employees a greater right, in the event they are injured as a result of work, than the regular employees have. The exclusive remedy provision of the Wisconsin Worker’s Compensation Act has been amended over the years to take into account the temporary worker relationship with a host employer and, as everyone thought before now, to treat that relationship the same way the Act treats the relationship of the employer and its direct employee. The court’s decision turns that principle and, many would agree the Wisconsin legislature’s intention on their heads.

Conclusion

It is likely either that the Court of Appeals’s decision will be appealed successfully to the Wisconsin Supreme Court or that the legislature will enact a statutory fix promptly. In the meantime, however, employers in Wisconsin should be aware that in the event any temporary employee working for them is injured as a result of that work, they may be exposed to a tort suit by the worker.