The Borrowed Servant Doctrine – At What Point Will the General Employer’s Liability Be Severed?

Introduction: The Borrowed Servant Doctrine

The borrowed servant doctrine is applicable to situations where one employer loans its employee to another employer.[1]  Whether the employee is a borrowed servant of another “hinges on whether the other employer or its agents have the right to direct and control the employee with respect to the details of the particular work at issue.”[2]  The doctrine is based upon respondeat superior, “the concept by which the master is vicariously liable for a servant’s torts committed in the course and scope of employment.”[3]

How Texas Courts Analyze Borrowed Servant Cases

First, in determining who has control over the employee, courts will determine whether there is a contract assigning the right of control over that particular employee.[4]  However, the existence of a contract alone is not dispositive.[5]  Additionally, authority over every detail of the employee’s work is not essential for the borrowing employer to be held the controlling party over the employee.[6]  Instead, courts will consider multiple factors to determine who has control over the employee, including:

  • the nature of the general project;
  • the nature of the work to be performed by the furnished employees;
  • the length of the employment, any machinery furnished;
  • any kind of act representing an exercise of actual control and;
  • the right to substitute another operator if needed.[7]

Determining Which Employer Is Liable For The Employee’s Negligence

Once an employer has the “right to direct and control the details of the particular work”, vicarious liability has been established.[8]  In Lara v. Lile, a wrongful death action was brought against the owner of a trucking company.[9]  The truck driver, while operating as a sub-contractor for another employer, Heldenfels, caused an accident which killed a Heldenfels employee.[10]  Lile, the owner of the trucking company, claimed the driver was a borrowed servant of Heldenfels, thus negating Lile’s liability.[11]  The court held that, even though the driver was operating for Heldenfels at the time of the accident, Lile still had the “right to direct and control” the employee.[12]  Because the contract between Lile and Heldenfels did not address the right of control, the court looked at which employer controlled the pertinent aspects of the job.[13]  The court found Lile continued to hold the driver on the payroll, continued to control the manner of operation and the caring for his equipment, and could replace each employee furnished by his own choosing.[14]  Therefore, Lile had the right of control and was held vicariously liable for the driver’s negligence.[15]

Texas Workers’ Compensation Act and the Borrowed Servant Doctrine

A borrowed servant question also arises in workers compensation disputes.  “When there is a question as to whether one is an employer under the Texas Workers Compensation Act (TWCA), Texas courts turn to the borrowed servant doctrine.”[16]  In Phillips v. Am. Elastomer Prod., L.L.C., the employee sustained injuries as a result of an autoclave explosion at the company’s rubber manufacturing plant.[17]  The employee, Phillips, began working at AEP through a staffing agency.[18]  After sustaining injuries from the explosion, Phillips sued AEP for negligence, gross negligence, and premises liability.[19]

AEP moved for summary judgment based on the TWCA’s exclusivity provision, which bars common-law causes of action by an injured employee and, thus, creates an exclusive remedy within the TWCA.[20]  Phillips argued he was not a borrowed servant of AEP and, therefore, the exclusivity provision did not apply.[21]  The court ultimately held that Phillips was a borrowed servant of AEP because he reported to work at AEP, AEP set his work hours and breaks, AEP’s employees trained Phillips, AEP directed what work was to be performed, and AEP provided machines and tools for Phillips.[22]  By holding that Phillips was a borrowed servant of AEP, the exclusivity provision was applicable and the court of appeals affirmed the summary judgment ruling in favor of AEP.[23]

Conclusion

Courts consistently apply the borrowed servant doctrine when determining liability between a general employer and a borrowing employer.  Deciphering factors such as day-to-day control of the employee, direction of the employee, and ownership of the machinery the employee was using helps dictate which employer will be held liable for any negligent acts committed by the employee.  Furthermore, in a Texas Workers’ Compensation Act case, these factors also help determine whether the exclusivity provision of the TWCA will apply.


[1] See Sparger v. Worley Hosp., Inc., 547 S.W.2d 582, 583 (Tex. 1977).

[2] St. Joseph Hosp. v. Wolff, 94 S.W.3d 513, 537 (Tex. 2002).

[3] Lara v. Lile, 828 S.W.2d 536, 538 (Tex. App.—Corpus Christi 1992, writ denied).

[4] Producers Chem. Co. v. Mckay, 366 S.W.2d 220, 226 (Tex. 1963).

[5] See Exxon Corp. v. Perez, 842 S.W.2d 629, 630 (Tex. 1992).

[6] See Cearley v. Cross Timbers Prod. Co., 855 S.W.2d 852, 854 (Tex. App.—El Paso 1993, no writ).

[7] Mckay, 366 S.W.2d at 226.

[8] Wolff, 94 S.W.3d at 573.

[9] Lara, 828 S.W.2d at 537.

[10] Id.

[11] Id. at 538.

[12] Id. at 540.

[13] Id.

[14] Id.

[15] See id.

[16] Tex. Workers’ Comp. Ins. Fund v. Del Indus., Inc., 35 S.W.3d 591, 595 (Tex. 2000)

[17] See Phillips v. Am. Elastomer Prod., L.L.C., 316 S.W.3d 181, 184 (Tex. App.—Houston [14th Dist.] 2010, pet. denied).

[18] Id.

[19] Id.

[20] Id. at 186.

[21] Id. at 187.

[22] Id. at 188.

[23] See id.

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