Falge v. Lindoo Installations, Inc.

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Appellate Court Date: 2017.05.11

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Falge v. Lindoo Installations, Inc., 2017 IL App (2d) 160242

Appellate Court TERRANCE L. FALGE, Plaintiff-Appellant, v. LINDOO

Caption INSTALLATIONS, INC., Defendant-Appellee.

District & No. Second District

Docket No. 2-16-0242

Filed March 24, 2017

Decision Under Appeal from the Circuit Court of Du Page County, No. 13-L-0399; the

Review Hon. Robert G. Kleeman, Judge, presiding.

Judgment Affirmed.

Counsel on Donald H. Olek, of Naperville, for appellant.

Appeal

Robert H. Fredian, Richard J. Leamy, Jr., and Kristen A. Schank, of

Wiedner & McAuliffe, Ltd, of Chicago, for appellee.

Panel JUSTICE BURKE delivered the judgment of the court, with opinion.

Justices Birkett and Spence concurred in the judgment and opinion.

OPINION

¶1 Plaintiff, Terrance L. Falge, filed this negligence action in the circuit court of Du Page

County against defendant, Lindoo Installations, Inc. (Lindoo), seeking damages for an injury

he sustained in a work-related accident. On August 7, 2012, plaintiff was working for Lindoo

when a bundle of shelving shifted and trapped his right index finger against a forklift. Plaintiff

was employed by Labor Ready Midwest, a temporary staffing agency, and, on the date in

question, was assigned by Labor Ready to work for Lindoo. Plaintiff filed for workers’

compensation benefits from Labor Ready and filed the present suit against Lindoo. Lindoo

filed a motion for summary judgment under the exclusive-remedy provision of the Workers’

Compensation Act (Act) (820 ILCS 305/5(a) (West 2012) (employee has no common-law

right to recover damages other than those provided by the Act)). Lindoo alleged that it was a

“borrowing employer” and plaintiff was a “loaned employee” at the time of the accident and

that, therefore, Lindoo was entitled to the protections of the Act’s exclusive-remedy provision.

See 820 ILCS 305/1(a)(4) (West 2012) (borrowing employers are covered by the Act). The

trial court granted Lindoo’s motion. On appeal, plaintiff argues that summary judgment was

improper because there was a question of material fact as to whether Lindoo was a borrowing

employer and thus was entitled to invoke the exclusive-remedy provision. We affirm.

¶2 I. BACKGROUND

¶3 The following is taken from the pleadings, depositions, and affidavits on file. On August 7,

2012, plaintiff was employed by Labor Ready, which provides permanent and temporary

employees to its clients. Once Labor Ready places an employee with a client, Labor Ready

expects that the client will supervise, direct, and control the work of that employee. Upon

placement, Labor Ready notifies an employee that he or she should report to the client’s

location and that he or she will be under the supervision and direction of the client upon arrival.

Labor Ready provides basic training, but it expects the client to provide further task-specific

training to the employee.

¶4 Lindoo was a client of Labor Ready. Lindoo installs industrial storage shelves for its

customers. On December 8, 2011, Labor Ready and Lindoo entered into a national contract,

pursuant to which Labor Ready supplied temporary employees. The national contract

provides, in relevant part:

“Customer [Lindoo] understands that Supplier [Labor Ready] will not be providing

supervision services for its temporary employees under the Agreement and [Lindoo]

shall be responsible for supervising and directing the activities of the temporary

employees ***.

Supervision. [Lindoo] understands that [Labor Ready] will not be providing

services for its temporary employees under this Agreement and that [Lindoo] shall be

responsible for supervision and directing the activities of temporary employees.”

¶5 In addition to the national contract, Lindoo entered into a contract with Labor Ready’s

Aurora, Illinois, office on May 4, 2012 (local contract). The local contract provides, in part:

“Customer Responsibilities. [Lindoo] must provide adequate supervision;

accurately record all hours worked, including overtime; provide any meal and rest

breaks required by law ***.

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Safety. Since our workers will be under your supervision, they need to be included

in your safety and health program and you are required to comply with safety

regulations and provide any necessary site-specific safety training and equipment.”

¶6 Maria Hernandez, who was the branch manager of Labor Ready’s Aurora office, testified

at her deposition that plaintiff went to work for Lindoo as Labor Ready’s employee. Hernandez

stated that both the national and local contracts were in force on the date of plaintiff’s accident.

Consistent with the terms of the contracts, Labor Ready expected that Lindoo would supervise,

direct, and control plaintiff’s work. Stefanie Miller, Lindoo’s office manager and signatory on

the contracts, testified that a Labor Ready temporary employee assigned to Lindoo is under

Lindoo’s supervision, direction, and control. Miller stated that Lindoo sets the work schedule

for Labor Ready employees when they work for Lindoo and that the Labor Ready employees

work the same hours as Lindoo’s employees. Hernandez and Miller both testified that Lindoo

has the right to fire any Labor Ready employee from working for Lindoo.

¶7 On the day of the accident, Labor Ready told plaintiff to report to Lindoo and gave him a

brief description of the work that he was to perform for Lindoo. When he arrived at Lindoo,

plaintiff and five Lindoo employees were assigned to assemble and install industrial storage

shelves at a Benjamin Moore & Co. warehouse. Plaintiff testified that there did not appear to

be any “direct” supervisors from Lindoo actually directing the work and that he instead took

directions from the Lindoo employees in setting up the shelves. It was plaintiff’s

understanding that he was to follow their directions while he was working for Lindoo. Plaintiff

stated that neither Hernandez nor any other Labor Ready personnel was present while he

worked for Lindoo that day.

¶8 Plaintiff spent the morning erecting cross-members for the shelving units with a Lindoo

employee named “Misael,” and he followed Misael’s directions as they erected the

cross-members. Plaintiff took his lunch break at the same time as the other members of the

crew. After his lunch break, plaintiff worked with the uprights for the shelves. The uprights

were bundled together by three metal bands and were transported with a forklift. The uprights

needed to be unbundled by using shears to cut the metal bands. The shears were provided by

Lindoo.

¶9 Plaintiff was directed to cut the metal bands on the bundles by a Lindoo employee who was

operating a forklift. Plaintiff explained that there was a “big communication gap because [the

forklift operator] didn’t speak English.” So, the forklift operator used “a lot of” head nods and

pointing. The forklift operator first pointed to the tools and signaled “cut,” which plaintiff

understood to mean that he wanted plaintiff to pick up the shears. Then the forklift operator

pointed to a metal band on the outside of the bundle, which plaintiff took to mean that he

wanted plaintiff to cut that band with the shears. After the first one was cut, the operator then

pointed again, so plaintiff cut the second band. When plaintiff cut it, the bundle shifted and

trapped plaintiff’s right index finger against the forklift. As a result, plaintiff suffered a partial

amputation of his right index finger. Plaintiff filed a workers’ compensation claim against

Labor Ready and filed the present suit against Lindoo, alleging that his injuries were

proximately caused by Lindoo’s negligence.

¶ 10 Lindoo filed a motion for summary judgment, arguing that, as a borrowing employer, it

could not be sued for negligence because plaintiff’s exclusive remedy was under the Act. The

trial court agreed, and it granted Lindoo’s motion. Plaintiff timely appeals.

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¶ 11 II. ANALYSIS

¶ 12 Plaintiff argues that the trial court erred in granting summary judgment in favor of Lindoo

because there was a genuine issue of material fact as to whether he was Lindoo’s borrowed

employee under the Act. We disagree.

¶ 13 Summary judgment is proper when “the pleadings, depositions, and admissions on file,

together with the affidavits, if any, show that there is no genuine issue as to any material fact

and that the moving party is entitled to a judgment as a matter of law.” 735 ILCS 5/2-1005(c)

(West 2012). “The purpose of summary judgment is not to try a question of fact, but to

determine whether a genuine issue of material fact exists.” Illinois State Bar Ass’n Mutual

Insurance Co. v. Law Office of Tuzzolino & Terpinas, 2015 IL 117096, ¶ 14. In determining

whether a genuine issue of material fact exists, the pleadings, depositions, admissions, and

affidavits, if any, must be strictly construed against the moving party and liberally in favor of

the nonmoving party. Mashal v. City of Chicago, 2012 IL 112341, ¶ 49. A genuine issue of

material fact exists where the material facts are disputed or where reasonable persons might

draw different inferences from the undisputed facts. Id. Although summary judgment can aid

in the expeditious disposition of a lawsuit, it is a drastic measure and, therefore, should be

allowed only where the right of the moving party is clear and free from doubt. Williams v.

Manchester, 228 Ill. 2d 404, 417 (2008). A trial court’s order granting summary judgment is

reviewed de novo. Illinois State Bar Ass’n Mutual Insurance Co., 2015 IL 117096, ¶ 14.

¶ 14 The Act is designed to provide financial protection to workers for accidental injuries

arising out of and in the course of employment. Meerbrey v. Marshall Field & Co., 139 Ill. 2d

455, 462 (1990). The Act imposes liability without fault upon the employer and, in return,

prohibits common-law suits by employees against the employer. Id. Section 5(a), the

exclusive-remedy provision, prohibits employees from suing their employers for negligence.

See, e.g., Reichling v. Touchette Regulatory Hospital, Inc., 2015 IL App (5th) 140412,

¶¶ 25-26; Prodanic v. Grossinger City Autocorp, Inc., 2012 IL App (1st) 110993, ¶¶ 14-15.

Section 1(a)(4) recognizes the concept of borrowing and loaning employers. 820 ILCS

305/1(a)(4) (West 2012). The exclusive-remedy provision extends immunity to borrowing and

loaning employers as well. 820 ILCS 305/5(a) (West 2012).

¶ 15 An employee in the general employment of one employer may be loaned to another for the

performance of special work and become the employee of the employer to whom he or she is

loaned while performing the special service. A.J. Johnson Paving Co. v. Industrial Comm’n,

82 Ill. 2d 341, 346-47 (1980). Our supreme court has long recognized the borrowed-employee

doctrine as applicable to workers’ compensation cases. Id. at 347. The borrowed-employee

doctrine was specifically incorporated into the Act by the inclusion of section 1(a)(4), which

provides, in pertinent part, as follows:

“Where an employer operating under and subject to the provisions of this Act loans

an employee to another such employer and such loaned employee sustains a

compensable accidental injury in the employment of such borrowing employer and

where such borrowing employer does not provide or pay the benefits or payments due

such injured employee, such loaning employer is liable to provide or pay all benefits or

payments due such employee under this Act and as to such employee the liability of

such loaning and borrowing employers is joint and several, provided that such loaning

employer is in the absence of agreement to the contrary entitled to receive from such

borrowing employer full reimbursement for all sums paid or incurred pursuant to this

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paragraph together with reasonable attorneys’ fees and expenses in any hearings before

the Illinois Workers’ Compensation Commission or in any action to secure such

reimbursement. ***

***

An employer whose business or enterprise or a substantial part thereof consists of

hiring, procuring or furnishing employees to or for other employers operating under

and subject to the provisions of this Act for the performance of the work of such other

employers and who pays such employees their salary or wages notwithstanding that

they are doing the work of such other employers shall be deemed a loaning employer

within the meaning and provisions of this Section.” 820 ILCS 305/1(a)(4) (West 2012).

¶ 16 There is no question that Labor Ready qualifies as a loaning employer. We must determine,

however, whether Lindoo qualifies as a borrowing employer. To determine whether a

borrowed-employee relationship existed, the inquiry is twofold: (1) whether the special

employer had the right to direct and control the manner in which the special employee

performed the work and (2) whether there existed a contract of hire between the special

employee and the special employer, either express or implied. A.J. Johnson Paving, 82 Ill. 2d

at 348. Whether a borrowed-employee relationship existed is generally a question of fact, but if

the facts are undisputed and permit but a single inference, the question is one of law. Id. at

348-49; Reichling, 2015 IL App (5th) 140412, ¶ 28.

¶ 17 In workers’ compensation cases, the primary factor considered in determining whether a

borrowed-employee relationship existed is whether the alleged borrowing employer had the

right to direct and control the manner in which the work was to be performed. Reichling, 2015

IL App (5th) 140412, ¶ 28. In A.J. Johnson Paving, our supreme court found that the following

factors supported a determination that the borrowing employer had the right to control and

direct the manner in which the employee performed the work: (1) the employee worked the

same hours as the borrowing employer’s employees, (2) the employee received instruction

from the borrowing employer’s foreman and was assisted by the borrowing employer’s

employees, (3) the loaning employer’s supervisors were not present, (4) the borrowing

employer was permitted to tell the employee when to start and stop working, and (5) the

loaning employer relinquished control of its equipment to the borrowing employer. A.J.

Johnson Paving, 82 Ill. 2d at 349. The court found that, although the employee’s skill as an

operator permitted him to exercise control over the paving machine and the technical details of

the paving operation, it did not preclude a finding that the borrowing employer had the right to

control the manner of the work. Id. The court also found that it was irrelevant that the

employee received his salary from the loaning employer rather than the borrowing employer.

Id.

¶ 18 Illinois courts have also considered whether the alleged borrowing employer had the right

to discharge the employee. See, e.g., Hastings v. Jefco Equipment Co., 2013 IL App (1st)

121568, ¶ 9. Although the borrowing employer need not have the power to dismiss the

employee from his general employment, it must have the power to dismiss him from the

borrowed employment. Id.

¶ 19 The second factor considered in determining whether a borrowed-employee relationship

existed is whether there was an express or implied contract of hire between the employee and

the alleged borrowing employer. A.J. Johnson Paving, 82 Ill. 2d at 348. “In order to establish

such a contract there must be at least an implied acquiescence by the employee in the

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relationship.” Id. at 350. Implied acquiescence to an employment relationship exists “where

the employee knows that the borrowing employer generally controls or is in charge of the

employee’s performance.” Prodanic, 2012 IL App (1st) 110993, ¶ 17. “Furthermore, the

employee’s acceptance of the borrowing employer’s direction demonstrates the employee’s

acquiescence to the employment relationship.” Id.

¶ 20 In Chaney v. Yetter Manufacturing Co., 315 Ill. App. 3d 823 (2000), the plaintiff worked

for a temporary agency. The temporary agency handled its employees’ payroll, tax

withholding and reporting, and insurance, and it provided workers’ compensation coverage for

its employees. Id. at 825. When the plaintiff arrived at the defendant’s facility, the defendant

supervised and directed her work activities. Id. at 829. The defendant told her to perform

specific tasks, and no one from the temporary agency was involved with or consulted

concerning any task she performed while working at the defendant’s facility. Id. The defendant

could not discharge her from her employment at the temporary agency, but it could dismiss her

from service at its facility. Id. The appellate court affirmed summary judgment in favor of the

defendant, finding that the defendant controlled the plaintiff while she was working at its

facility. Id. at 829-30. The court held that the defendant’s right to dismiss the plaintiff from

service at its facility and to send her back to the temporary agency was sufficient to satisfy the

discharge element of the control test. Id. The court also found that the plaintiff impliedly

agreed to the borrowed-employee relationship where there was no dispute that she knew she

was working for the defendant but through the temporary agency. Id.

¶ 21 In Chavez v. Transload Services, L.L.C., 379 Ill. App. 3d 858 (2008), the plaintiff argued

on appeal that the trial court erred in granting the defendant’s motion to dismiss because there

was a question of fact as to whether he was the defendant’s borrowed employee. Id. at 861. In

holding that the defendant was a borrowing employer, entitled to the protections of the

exclusive-remedy provision of the Act, the court noted that the plaintiff accepted the

defendant’s employee handbook and received individualized training from the defendant; that

the defendant had the right to discharge the plaintiff for any reason, to set his schedule, and to

control his work, all of which indicated that the defendant exercised a large degree of control

over his employment; and that he was treated the same as the defendant’s employees in that he

worked the same hours, took breaks at times designated by the defendant, and received

instructions from the defendant as to how to perform particular tasks. Id. at 863. The court also

found that the plaintiff impliedly consented to the borrowed-employee relationship by

accepting the employment assignment with the defendant, as well as the defendant’s control

and direction of his work activities. Id.

¶ 22 In the present case, construing the evidence strictly against Lindoo and liberally in favor of

plaintiff, it is clear from the undisputed material facts that a borrowed-employee relationship

existed between plaintiff and Lindoo at the time of his accident. Plaintiff testified at his

deposition that there did not appear to be any “direct” supervisors from Lindoo who were

actually directing the work. However, he testified that he was taking directions from Lindoo’s

employees when he was setting up the shelves at the warehouse and, specifically, when he was

injured. Although plaintiff argues that it was difficult to understand directions because many of

Lindoo’s employees spoke Spanish, plaintiff testified that he understood what he was

supposed to do through the use of hand gestures and other nonverbal communication. Also,

Lindoo set plaintiff’s work schedule, controlled when he took his breaks, and provided him

with the tools to perform the tasks assigned by Lindoo on the date of the accident.

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¶ 23 Moreover, the contract between Labor Ready and Lindoo states that all temporary

employees provided to Lindoo by Labor Ready were under Lindoo’s supervision and

direction. Lindoo also had the right to discharge plaintiff from his employment with Lindoo. It

is inconsequential who actually was paying plaintiff for his services. See, e.g., A.J. Johnson

Paving, 82 Ill. 2d at 349 (the court did not “deem relevant” the fact that the plaintiff was paid

by the loaning employer rather than the borrowing employer; “[t]he mere fact that the

employee does not receive his wages from the [borrowing] employer will not defeat the

finding of a loaned-employee situation”); American Stevedores Co. v. Industrial Comm’n, 408

Ill. 449, 455-56 (1951) (holding that the case came within the borrowed-employee doctrine as

a matter of law where Frigidaire procured temporary workers through Stevedores but

Stevedores was merely the agency that picked the workers and the conduit through which they

were paid); Chaney, 315 Ill. App. 3d at 828-30 (although temporary employment agency paid

plaintiff, handled her unemployment insurance, social security, and tax deductions, and carried

malpractice, general liability, and workers’ compensation insurance, it was undisputed that

borrowing employer supplied temporary employment agency with the number of hours

plaintiff worked each day and temporary employment agency billed borrowing employer for

those hours at an agreed-upon rate, which included reimbursement for those payroll expenses

plus a profit, suggesting that temporary employment agency was merely a conduit through

which plaintiff was paid).

¶ 24 Plaintiff attempts to establish that while he was working for Lindoo he was still under the

supervision of Labor Ready because Hernandez would, from time to time, call on clients to see

how things were going. Plaintiff points out that Hernandez was to be informed if there were

any problems with a temporary employee’s placement. However, these customer service

actions by Labor Ready did not establish any form of supervision over plaintiff’s work for

Lindoo. There is no evidence that anyone from Labor Ready was involved with or was

consulted about any task plaintiff performed for Lindoo. See Chaney, 315 Ill. App. 3d at 829.

¶ 25 As to whether an express or implied agreement existed between plaintiff and Lindoo, an

employee’s consent to the employer-employee relationship may be implied in the context of a

business like a temporary employment agency. Id. In Chaney, there was no dispute that

Chaney knew that she was working for the defendant through the temporary agency. The court

found that, under those circumstances, Chaney impliedly agreed to the loaned-employee

relationship. Id. at 829-30. The same facts are present here, where plaintiff impliedly

consented to a loaned-employee relationship because the testimony demonstrates that he was

aware that he was working for Lindoo through Labor Ready and that he accepted the

temporary employment assignment.

¶ 26 The temporary agency cases finding a borrowed-employee relationship (Reichling,

Chaney, Chavez) are consistent with the trial court’s ruling here. The cases relied upon by

plaintiff, namely Gundich v. Emerson-Comstock Co., 21 Ill. 2d 117 (1960), Hastings v. Jefco

Equipment Co., 2013 IL App (1st) 121568, Palomar v. Metropolitan Sanitary District of

Greater Chicago, 225 Ill. App. 3d 182 (1992), and Casey v. E.J. Cattani & Son Gravel, 133 Ill.

App. 3d 18 (1985), are distinguishable. None of those cases involved a temporary agency that

placed employees to work for employers pursuant to a contract that spelled out the employers’

supervisory responsibilities.

¶ 27 Because the undisputed material facts demonstrate that Lindoo directed and controlled

plaintiff’s work and that plaintiff consented to the borrowed-employee relationship with

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Lindoo, there is no genuine issue of material fact as to whether Lindoo was a borrowing

employer. Therefore, the trial court properly determined, as a matter of law, that plaintiff was

Lindoo’s borrowed employee at the time of his accident and that, thus, his negligence action

against Lindoo was barred by the exclusive remedy provision of the Act. Accordingly, the trial

court properly granted summary judgment in favor of Lindoo.

¶ 28 III. CONCLUSION

¶ 29 For the preceding reasons, we affirm the judgment of the circuit court of Du Page County.

¶ 30 Affirmed.

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