Co-Employment Situations Can Create Unforeseen Workers’ Compensation Liability

It is not uncommon to find situations where one company will lease or utilize the services of the employee of another company or governmental agency for work on a project.  If that employee is injured, questions can arise as to which employer should be held responsible for the recognized workers’ compensation claim.  In most of these claims, there is no dispute that the employee was injured in the course of employment.  The question is who is the liable employer?

In the case of State ex rel. Oakwood v. Indus. Comm., No. 2012-Ohio-3209, the Ohio Supreme Court reviewed a case involving an Oakwood police officer who was hired by Kokosing Construction Company to perform traffic control duties on a highway construction project.  Mr. Ali was injured when his patrol car was struck at the project by a third party.  Initially, the claim was allowed against Kokosing Construction Company; however, on further appeal, the Industrial Commission found that the proper employer was the City of Oakwood.  Oakwood then filed a mandamus action challenging this ruling.

In affirming the Industrial Commission’s determination against Oakwood, the Ohio Supreme Court first recognized that there is no set standard or list of factors that the Commission or any Court must use when reviewing these types of cases.  Instead, the Court held that the totality of the circumstances must be reviewed regarding the accident to determine who the proper employer should be.  While the Commission may consider factors such as who controls the injured worker’s activities and who benefits from the injured worker’s activities, other facts may also be relevant.  In this instance, the Court pointed out that the City of Oakwood required Kokosing Construction Company to utilize its officers for local traffic control on the project.  In addition, the Court noted that the City required Kokosing to utilize the Oakwood cruiser driven by Mr. Ali.  Also, the Court commented that Kokosing does not include as part of its normal business operations handling traffic control.  This was clearly an activity provided by the City of Oakwood; therefore, Mr. Ali’s activities as a traffic control officer at the construction project were activities controlled by and usually provided by the City of Oakwood.

The Oakwood decision provides a good illustration of what can happen when there are multiple employers involved in a particular activity and an injured worker is under the control of several different entities at the time of his or her injury.  It is a good idea in advance to try to establish who would be responsible for any workers’ compensation claims in these situations.