Affiliated NY Company Liable for Half of Driver’s Comp Benefits as Special Employer

In Matter of Mitchell v. Eaton’s Trucking Serv., Inc., 2018 N.Y. App. Div. LEXIS 6806 (3rd Dept., Oct. 11, 2018), a New York appellate court affirmed a decision of the state’s Workers’ Compensation Board that found that a truck driver was not only the general employee of the company that directly employed him; he was also a special employee of another closely-affiliated firm, making that second firm liable for 50 percent of the trucker’s workers’ compensation benefits.

Background

The workers’ compensation claimant was hired as a tractor truck driver to haul and deliver goods for Eaton’s Trucking Service, Inc. (“Eaton”). Eaton had contracted with Quality Carrier’s, Inc. (“Quality”) to transport products for Quality’s customers. In 2015, the driver filed a claim for injuries to his right hand, wrist, arm and shoulder, identifying both Eaton and Quality as his employer. Following a hearing, a WCLJ determined that the driver had an occupational disease of right carpal tunnel syndrome and found that Eaton was his general employer and Quality was his special employer, and that each was liable for 50% of the workers’ compensation awards. The Board upheld that determination.

Appellate Court’s Decision

On further appeal, the Court noted that the evidence established that Eaton and Quality had an arrangement whereby Eaton’s drivers, including claimant, hauled products exclusively for Quality’s customers, that Eaton operated under Quality’s logo and license without which Eaton could not have conducted its hauling operation (emphasis added). The Court said this sort of arrangement was the type in which the employee and equipment of the general employer were necessarily used and temporarily assigned to work for the business of the special employer—thus creating a special employment relationship.

The Court added that while Quality did not control the day-to-day oversight of the driver, this was not dispositive as Eaton and the driver operated entirely under Quality’s authority and pursuant to its policies. As a result, Quality had sufficient control over the details and ultimate result of the driver’s work that Quality could be be deemed to be his employer. Citing earlier authority, the Court stressed that where a claimant is employed by both a general and special employer, the Board is empowered to make an award against either or both of the employers as it sees fit.

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