Schedule a Consultation | Toll Free: 1-800-678-1307
Trial lawyers specializing in personal injury and civil litigation

Court examines workers compensation statute and definition of an "employee."

Joseph Derry did lawn work for a handful of families, but also hired himself out to a larger lawn care company.  While working for All Star Lawn Specialists Plus, Inc., Derry suffered severe injuries when he was struck by the boom of the large vacuum machine mounted on an All Star truck.  The owner of the landscaping company had failed to secure the the vacuum machine to the truck bed.

All Star was insured by Auto Owners for No Fault PIP benefits, workers compensation benefits and general liability (arising from negligence).  Derry applied for benefits under all three policies.  Where an injury victim qualifies as an "employee" eligible for work comp benefits, he collects medical and partial wages, but is not eligible to recover complete damages (such as full loss of earning capacity or any pain, disfigurement or other non-economic damage).

Because its payout would be smaller if Derry could only collect workers compensation benefits, Auto Owners filed suit against him, arguing that he was an "employee" and subject to the "exclusive remedy" provisins of workers compensation.  That is, Auto Owners argued that he could not seek a complete recovery of all of his legal damages.  The problem was that in a prior case, the Court of Appeals had ruled that someone in Derry's position did not qualify as an "employee" and could not collect work comp benefits.  For that reason, the trial court and the Court of Appeals panel that reviewed Derry's claim were required to follow precedent and allow Derry to sue for negligence.  In protest, the Republicans on the Court of Appeals panel called for a broader dispute resolution panel to reconsider the definition of "employee."

A panel was created and Kirsten F. Kelly, the insurer's best friend was appointed to write the majority opinion.  Not surprisingly, her majority held that Derry could not sue for negligence, over-ruling the prior Court of Appeals decisions.  The workers comp statute treats as an "employee" any person who "does not maintain a separate business, does not hold himself...out to and render service to the public, and is not an employer..."  Kelly's opinion rejected the prior analysis of the statute and ruled that since Derry could not meet all three of these conditions (he did some lawn work independently), he was an "employee" and not an independent contractor.

In some respects this interpretation is consistent with the intent of the workers compensation act, since long-standing Supreme Court holdings have interpreted the intent of the act to assure that "either by accident or subterfuge, a person who should be covered as an employee under the act is not classified as an independent contractor and escapes coverage."  Unfortunately, with Republican judges at the helm, the cases tend to find "employee" status when it works to the employer's advantage and to find "independent contractor" status when that works out best for the employer and insurer.  This appears to be one more example.

Thompson O’Neil, P.C.
309 East Front Street
Traverse City, Michigan 49684
Toll Free: 1-800-678-1307
Fax: 231-929-7262