Martin & Jones, PLLC
Call today for a Free consultation.

Workers' Comp: Court of Appeals Delivers Just Result for Temporary Employees

It is common knowledge, especially in these dismal economic times, that businesses often hire temporary workers, or "temps," to cut down on labor costs. By contracting with a temp agency to provide workers, a business can avoid the expenses of hiring a new employee - such as payroll taxes and fringe benefits like health insurance. In their contracts with temp agencies, these businesses often include a term declaring that the temporary workers are not employees of the business.

When temps suffer workplace injuries, however, these businesses unfairly try to have their cake and eat it too. They avoid all of the liabilities of treating temps like employees, but still enjoy all of the protections.

By including a contractual term that the temporary workers are not employees, these businesses avoid liability for worker's compensation claims when temps are injured on the job. As an added protection, these contracts contain a term declaring that the temp agency is solely responsible for the workers' compensation claim if a temp is injured while working for the business. Thus, businesses that use temps avoid all liability for workers' compensation claims.

But if an injured temporary worker is not an employee, the temp should be able to sue the business if its negligence caused the injury. These lawsuits are rarely successful, however, because the businesses are almost always granted the protections of treating temps as employees.

When defending these lawsuits, businesses rely on two legal principles - the "exclusive remedy" doctrine and the "special employment" doctrine. Under the exclusive remedy doctrine, an employee injured on the job cannot sue his employer for negligence; the employee's "exclusive remedy" for his injuries is workers' compensation. Under the special employment doctrine, an employer can loan out his employee to work for a "special employer." Assuming three requirements are met, the loaned worker is considered the employee of the special employer.

The application of these two doctrines to temporary employees is obvious. When a temp is injured on the job and sues the business for negligence, the business tries to defeat the lawsuit by claiming to be his special employer. And if the business can convince the court that it is the temp's special employer, then lawsuit is barred by the exclusive remedy doctrine. This strategy has worked over and over again with North Carolina courts.

Thanks to a case the Court of Appeals issued last week, however, this unjust arrangement may be at an end. In Gregory v. Pearson, a temp working for Cleveland County filed a lawsuit against the County after suffering a workplace injury. Predictably, the County argued that the lawsuit was barred by the special employment and exclusive remedy doctrines. The trial court found that the County was the temp's special employer, and so dismissed the case. The Court of Appeals reversed the decision.

The Court held that the County failed to satisfy the first requirement of the special employment doctrine, i.e., that the employee had entered a contract of employment with the County. In reaching this decision, the Court closely examined the county's contract with the temp agency. The contract expressly stated that temporary workers were not employees of the County. Due to this contractual term, the Court refused to find that the temp had entered a contract of employment with the county. The temp was, therefore, not a special employee, and her case was not barred by the exclusive remedy doctrine.

As the Court explained, the County "chose not to establish an employment relationship" with the temporary worker. In doing so, the County gave up "both the liabilities and protections" of workers' compensation. The Court reasoned, "Having made a contract which allocated the risk of workers' compensation liability to [the temp agency], the County may not now use the Workers' Compensation Act as a shield against the risk of 'large damage verdicts' for tort liability."

In our view, Gregory simply allows temp workers to be treated fairly under the law. Businesses that use temps cannot avoid liability for both workers' compensation claims and civil lawsuits. If in their contracts with temp agencies, businesses deem temp workers not to be their employees, then those businesses leave themselves open to negligence claims when temps are injured on the job.


Follow us on Twitter for workers' comp news and updates: @mjworkerscomp

No Comments

Leave a comment
Comment Information

Martin & Jones Reviews

  • "I just wanted you to know how much my family and I appreciate the work that you (Mike Riley) and everyone at Martin & Jones have done for us over the years. The initial settlements helped Mom and Dad live comfortably during his illness and afforded him the care that he needed. Since his passing nine years ago, your continued efforts on our behalf have been nothing short of a blessing. Mom, who will be 92 in September, has many medical issues but is still very sharp mentally, and enjoys being able to live at home. I just want you and everyone at Martin & Jones to know how grateful we are."

    Fred G., whose father had mesothelioma
  • "Thank you for everything that you have done for us. We are fortunate to know you. We appreciate all of the hard work, long hours and care that was shown to us before and during the trial. Without your help and representing us, we would not be as blessed as we are now. All of you are very special to us. We know that you have the best and attorneys and staff there is."

    Hazel P.
  • "Thank you for your concern of my well-being every time I spoke with you. It always meant so much. I hear nothing but awful stories of dealing with attorneys and their offices, but I have had nothing but positive experience. You have many special ways of working with people in need of help. Words can never express the way your support has been so helpful. I pray you will continue to help others. I wish you all the best."

    Mary C
  • "Forest, once again, my family and I thank you for obtaining another settlement on behalf of my Father. It's almost uncanny that these checks seem to come at very opportune times. This one comes as we are expecting our fourth grandchild. It will provide her some sound footing towards her future college education, plus help Mom and Dad with the medical expenses. Sometimes, I think my Dad is helping you guys with this. Maybe so. Anyway, thank you again for your hard work."

    Mike G.
  • "I appreciate all you're doing and trying to do for me. I don't think I've ever talked to a nicer attorney than Mike, and his assistant (certified paralegal Marjorie Kartanson). You're real nice people. It really makes you feel better, even with all the problems I have."

    Larry A.
  • "Thank you for the work you have done for Carl and our family. We so much appreciate your sincere professionalism and kindness you showed us. I know Carl is smiling right now and the Lord has blessed us through you. May God bless you."

    Connie M. whose husband Carl worked as a brakeman for CSX Transportation and died of mesothelioma
  • "Thank you for always making me feel welcome and at ease in your office. I respect the work you do and your enthusiasm for it and am grateful for your talents."

    Tracy M.
  • "I would like to leave a testimonial thanking Steven and Allison for their care and understanding. Steven's pursuit and success in getting some compensation for our loss. A final closure of our loss of brother Mike. Thanks to Martin & Jones for looking after Mike's care since his injury in 2005. You have been there for Mike and his family for a long time. Mike passed in 2016 and you stood for the family up to the present (July 2017). Many thanks."

    Dan I.
  • "We would like to express our gratitude to you (Hunt Willis) for accepting our case. First of all, when I called this law firm, a very sweet and kind lady answered the telephone and gave me assurance by asking and going over the accident with me, while my husband was in the hospital. I felt assured I was doing the right thing for us. She was so helpful in so many ways. What a professional lady. Secondly, we are much pleased that you have settled this case with the insurance company to receive the proper amount to assist us in so many ways. My husband and I are very happy with you and the firm in handling our case. You made us have confidence in your professional and integrity along with your assistant Ms. Routh, when you both came to see us in our home, in which we saw your compassion and thoughtfulness at that time. We will never forget what you have done for us, and we thank the lord for directing me to contact this firm. I’m glad I did."


"Thank you for your concern of my well-being every time I spoke with you. It always meant so much. I hear nothing but awful stories of dealing with attorneys and their offices, but I have had nothing but positive experience. You have many special ways of working with people in need of help. Words can never express the way your support has been so helpful. I pray you will continue to help others. I wish you all the best."

Mary C
View More Reviews
Contact US Get Help Now

Send us an email or call us today at 800-662-1234 to speak with an attorney about your claim or to arrange a free consultation. It costs nothing to call and there is no obligation. In fact, we are not paid until your case is resolved. Se habla español. If you are unable to travel to one of our offices in Raleigh, Durham and Wilmington, we will meet with you at your location.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

Raleigh Office
410 Glenwood Avenue
Suite 200
Raleigh, NC 27603

Toll Free: 800-662-1234
Phone: 919-821-0005
Raleigh Law Office Map

Wilmington Office
1213 Culbreth Drive
Suite 121
Wilmington, NC 28405

Toll Free: 800-662-1234
Phone: 910-256-4005
Wilmington Law Office Map

Durham Office
302 East Pettigrew Street
Suite 330
Durham, NC 27701

Toll Free: 800-662-1234
Phone: 919-544-3000
Durham Law Office Map