IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA
June 22, 2011
JORGE CLAUDIO, PLAINTIFF,
MGS MACHINE CORP.,
TASTY BAKING CO., THIRD-PARTY DEFENDANT.
The opinion of the court was delivered by: Anita B. Brody, J.
On February 14, 2008, Plaintiff Jorge Claudio ("Claudio" or "Plaintiff") injured his hand while operating a cake-packaging machine manufactured by Defendant MGS Machine Corporation ("MGS" or "Defendant") at a Tasty Baking Company ("TBC") plant. See Compl. ¶¶ 8, 11, 17, ECF No. 1. Claudio has brought suit against MGS alleging negligence, strict liability in tort, and breach of warranty. MGS has filed a third-party complaint against TBC, claiming that TBC should answer for any and all liability that may be entered against MGS by way of sole liability, joint and several liability, indemnity, and/or contribution. Jurisdiction is proper pursuant to 28 U.S.C. § 1332.*fn1 TBC has moved for summary judgment on the grounds that it is immune from suit as Claudio‟s employer pursuant to the Pennsylvania Workers‟ Compensation Act. See 77 Pa. Stat. Ann. § 481 (West 2002). For the reasons set forth below, I will grant TBC‟s motion.
In June of 2007, Claudio applied and was hired for a position with Accu Staffing Services ("Accu"), a temporary staffing service that places associates with accepted clients throughout southern New Jersey and southeastern Pennsylvania. See Claudio Dep. 15:12-17, 39:16-20, Feb. 5, 2010, ECF No. 45; Coward Dep. 11:9-13, May 24, 2010, ECF No. 42. TBC is one such client of Accu, and on occasion requests temporary employees to fill positions at its plant. Coward Dep. 11:14-21; Godun Dep. 27:3-6, June 30, 2010, ECF No. 45. Shortly after hiring Claudio, Accu assigned him to work at TBC as a machine operator. See Mot. Summ. J. ¶ 6, ECF No. 42; Claudio Dep. 15:12-17, 39:16-20.
Before beginning work at TBC, Claudio watched a short training video at Accu, filmed at and approved by TBC. Claudio Dep. 41:11-17, 43:15-17; Godun Dep. 57:10-15. During his first week at TBC, Claudio shadowed and received guidance from a female TBC employee. Claudio Dep. 61:14-62:24, 63:11-64:14; Mem. Supp. Mot. Summ. J. 6, ECF No. 42. In later weeks, there was a "First Friday Safety Breaks" program; TBC provided the location and refreshments, and encouraged agency workers to spend their break reviewing safety topics and watching videos from the Accu library. Godun Dep. 34:1-35:24. As a general matter, TBC set safety regulations, which Accu distributed. Rasheed Dep. 10:4-10, June 11, 2010, ECF No. 42. Accu employees also occasionally visited the TBC plant to provide "initial training" and "cursory orientation." Coward Dep. 17:22-23.*fn3
While working at TBC, Claudio reported for duty to Syid Rasheed ("Rasheed"), an Accu employee. Claudio Dep. 54:11-15. Rasheed took attendance and reported the workers‟ hours to Accu for its payroll records. Mot. Summ J. ¶ 7; Rasheed Dep. 7:7-10:10; Claudio Dep. 54:11-15. Rasheed then told Claudio his floor assignment, which was determined by TBC. Claudio Dep. 45:20-46:1, 56:19-24; Godun Dep. 58:23-59:7; Mem. Supp. Mot. Summ. J. 8; Answer 14, ECF No. 45. Other than Rasheed, no one from Accu gave Claudio directions or orders during the course of the day. Claudio Dep. 69:20-24.
Claudio typically worked on the sixth floor of the TBC plant. Id. at 57:9-11. Eventually, Claudio received an identification card that read "Accu Staffing" but also bore a Tasty Kake logo. Id. at 48:23-49:1, 49:6-14. With the card, Claudio could swipe in at the sixth floor time clock. Id. at 49:23-50:2. TBC employees had different identification cards but swiped in using the same machine. Id. at 53:15-54:9.
On the sixth floor, TBC supervisor Linda Bartholomew ("Bartholomew") would describe to Claudio his daily duties. Id. at 57:1-5, 57:24-58:2. On occasion, Bartholomew changed Claudio‟s assignment, sending him to work on the fifth floor where he received subsequent instruction from another TBC employee, Billy. Id. at 57:6-58:21, 75:5-21. Normally, however, Bartholomew would give Claudio a specific job and assign him to a machine. Id. at 60:11-22. If Claudio ever had a problem with his assigned machine, he was to report back to Bartholomew. Id. at 63:1-10. If Bartholomew was not present, another TBC supervisor, Rose, would give Claudio this guidance. Id. at 68:4-16. In general, TBC supervisors demonstrated to Accu employees how to do the work, and could correct them when wrong. Id. at 127:21-128:8; Mr. Rasheed; whoever may have been in the position of authority at that particular time and that particular place."
Bartholomew Dep. 72:17-73:3, June 11, 2010, ECF No. 42. TBC supervisors also determined how long Accu employees spent on their tasks. Bartholomew Dep. 72:20-23.*fn4
Throughout the plant, Accu employees typically wore blue jumpsuits whereas TBC employees wore white uniforms with "Tasty Kake" written on them. Claudio Dep. 52:20-53:14. Both groups also wore brown jumpsuits on occasion, but the TBC employees‟ brown jumpsuit always bore a Tasty Kake logo. Id. at 55:6-24. TBC dictated what other clothing was acceptable while operating the machinery. Mem. Supp. Mot. Summ. J. 6; Claudio Dep. 123:3-125:4.
At all times material to this controversy, Accu paid Claudio. Mot. Summ. J. ¶ 8; Claudio Dep. 46:20-23. TBC could discipline Claudio in conjunction with Accu. Coward Dep. 128:19-129:6; see also Claudio Dep. 65:23-66:23; Reply 2, ECF No. 46.*fn5 TBC had the authority to end Claudio‟s assignment with TBC, at least in certain situations. Coward Dep. 125:7-20; Godun Dep. 60:4-24; see also Claudio Dep. 66:8-23.*fn6 At the same time, TBC coordinated such decisions with Accu. Coward Dep. 141:1-22; see also Godun Dep. 60:4-24.*fn7 TBC could not single-handedly terminate Claudio‟s employment with Accu; he would be terminated by Accu for cause, but TBC could play a role. Coward Dep. 125:20-21, 141:8-22; see also Reply 2.*fn8
On February 14, 2008, Claudio injured his hand at the TBC plant, while operating a cake-packaging machine manufactured by Defendant MGS. See Compl. ¶¶ 8, 11, 17. On March 12, 2008, Claudio filed a claim with the Bureau of Workers‟ Compensation against both TBC and Accu for the damages he sustained. Mem. Supp. Mot. Summ. J. 10; Mot. Summ J. Ex. I; id. Ex. J. In response, TBC filed an answer and, on March 27, 2008, wrote to the judge that TBC was not Claudio‟s employer. Mem. Supp. Mot. Summ. J. 10; Mot. Summ. J. Ex. H. Specifically, the letter read, "Most importantly, Jorge Claudio is not an employee of the Tasty Baking Company, but rather is employed by Accu Staffing . . . . Please accept this letter as a Motion to Dismiss the Tasty Baking Company from the Claim Petition litigation before you." Mot. Summ. J. Ex. H. On May 8, 2008, Claudio advised the judge that "Defendant/Employer [Accu Staffing] ha[d] accepted the claim" and requested that the court "please mark the Claim Petition withdrawn." Id. Ex. I. Pennsylvania Workers‟ Compensation Judge Marc I. Harrison then issued an order stating that "[t]he Claim Petition filed by Claimant on March 12, 2008 is WITHDRAWN based upon the representations of Claimant‟s counsel in a May 8, 2008 letter." Id. Ex. J. Accu, through its insurance company, paid workers‟ compensation benefits to Claudio. Mem. Supp. Mot. Summ. J. 8; Claudio Dep. 28:3-9. Accu typically provides workers‟ compensation benefits to the workers it supplies to TBC. Coward Dep. 24:15-19.
Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a); see Kornegay v. Cottingham, 120 F.3d 392, 395 (3d Cir. 1997). A fact is "material" if the dispute "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A factual dispute is "genuine" if the evidence would permit a reasonable jury to return a verdict for the nonmoving party. Id.
The party moving for summary judgment bears the initial burden of demonstrating that there are no material facts supporting the nonmoving party‟s legal position. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the moving party carries this initial burden, the nonmoving party must set forth specific facts showing that there is a genuine issue for trial. See Matsushita Electric Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). The nonmoving party cannot rely upon "bare assertions, conclusory allegations or suspicions" to support its claim. Fireman's Ins. Co. v. DuFresne, 676 F.2d 965, 969 (3d Cir. 1982). Rather, the party opposing summary judgment must go beyond the pleadings and present evidence, through affidavits, depositions, or admissions on file, to show that there is a genuine issue for trial. Celotex, 477 U.S. at 324.
The threshold inquiry at the summary judgment stage involves determining whether there is the need for a trial, that is, "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson, 477 U.S. at 251-52.
TBC argues that it is immune from liability under the Pennsylvania Workers‟ Compensation Act as Claudio‟s employer. MGS counters that TBC was not Claudio‟s employer and is therefore not immune. MGS also asserts that TBC should be judicially estopped from presenting itself as Claudio‟s employer in light of prior statements to the contrary. The evidence of record supports TBC‟s positions, namely that TBC employed Claudio and should not be judicially estopped from so claiming.
A.TBC as Claudio's Employer
TBC moves for summary judgment on the grounds that it is immune from liability as Claudio‟s employer pursuant to the terms of the Pennsylvania Workers‟ Compensation Act.
The Pennsylvania Workers‟ Compensation Act "grants employees the right to a fixed level of compensation for work-related injuries and, in return, exempts their employers from common law liability for negligence." Mathis v. United Eng'rs & Constructors, Inc., 554 A.2d 96, 101 (Pa. Super. Ct. 1989). Thus, liability under the Act is to be exclusive, and employers are not to be liable to employees "in any action at law or otherwise on account of any injury or death . . . or occupational disease." 77 Pa. Stat. Ann. § 481(a) (West 2002); see also Black v. Labor Ready, Inc., 995 A.2d 875, 876 n.3 (Pa. Super. Ct. 2010) (""Where an employee‟s injury is compensable under the Act, the compensation provided by the statute is the employee‟s exclusive remedy against his or her employer. Thus, an injured employee cannot maintain a tort action against his or her employer if the injury is compensable under the provisions of the Act.‟" (quoting Albright v. Fagan, 671 A.2d 760, 762 (Pa. Super. Ct. 1996))).
This immunity extends to employers impleaded for purposes of contribution or indemnity: "In the event injury or death to an employe is caused by a third party, then such employe . . . may bring their action at law against such third party, but the employer . . . shall not be liable to a third party for damages, contribution, or indemnity in any action at law . . . ." 77 Pa. Stat. Ann. § 481(b); see also Lackie v. Niagara Mach. & Tool Works, 559 F. Supp. 377 (E.D. Pa. 1983).
The Act references and defines the term "employer" in §§ 21*fn9
and 52.*fn10 See Martin v. Recker, 552 A.2d
668, 671 (Pa. Super. Ct. 1988). In addition, Pennsylvania courts have
held that the borrowed employee doctrine is relevant to the
determination of employer status for purposes of the Workers‟
Compensation Act. According to that doctrine,
[t]he test for determining whether a servant furnished by one person
to another becomes the employee of the person to whom he is loaned is
whether he passes under the latter‟s right of control with regard not
only to the work to be done but also to the manner of performing it.
The entity possessing the right to control the manner of the
performance of the servant‟s work is the employer, irrespective of
whether the control is actually exercised. Other factors which may be
relevant include the right to select and discharge the employee and
the skill or expertise required for the performance of the work. The
payment of wages may be considered, but is not a determinative factor.
Although the examination of these
factors guides the determination, each case must be decided on its own
JFC Temps, Inc. v. Workmen's Comp. Appeal Bd., 680 A.2d 862, 864 (Pa. 1996) (internal citations omitted). The Pennsylvania Supreme Court has concluded that "the right to control the performance of the work is the overriding factor." Id. at 865; see also Mature v. Angelo, 97 A.2d 59, 60 (Pa. 1953).*fn11
As a general matter, the issue of whether an employer is entitled to immunity under the Workers‟ Compensation Act "is properly the subject of a motion for summary judgment, as "whether the facts as they are determined to exist constitute an employment relationship is strictly a question of law.‟" Wilkinson v. K-Mart, 603 A.2d 659, 660-61 (Pa. Super. Ct. 1992) (quoting Keller v. Old Lycoming Twp., 428 A.2d 1358, 1361 (Pa. Super. Ct. 1981)); see also JFC, 680 A.2d at 864 ("The question of whether an employer-employee relationship exists is one of law, based upon findings of fact."); Mature, 97 A.2d at 61 ("[T]he question as to who is the servant‟s employer is a matter for the determination of the court."); English v. Lehigh Cnty. Auth., 428 A.2d 1343, 1348 (Pa. Super. Ct. 1981).
In this case, TBC held the right to control the performance of Claudio‟s work. As laid out above, TBC told Rasheed where to send Claudio, and Bartholomew, a TBC Supervisor, reassigned Claudio when necessary. Once on a floor, TBC employees managed Claudio‟s tasks. Bartholomew gave Claudio specific jobs and sent him to certain machines, and received complaints from Claudio when those machines were not working properly. Rose gave Claudio instruction in Bartholomew‟s absence. Both could correct Claudio when his methods were improper. These facts indicate that TBC controlled the work to be done and the manner of performing it. Thus the overriding factor in the borrowed employee analysis reveals TBC to be Claudio‟s employer.
Moreover, other considerations similarly point to TBC as Claudio‟s employer. For instance, TBC provided a full week of training to Claudio, dictated what clothing he could wear, and placed its logo on his identification card. TBC could also end Claudio‟s assignment at the plant in certain circumstances if dissatisfied with his work.
MGS submits that Accu never relinquished control over its workers, as evidenced by the fact that Claudio had to report to Rasheed, an Accu employee, daily, and that Accu as opposed to TBC investigated his injury. MGS also suggests as considerations that Accu hired Claudio, paid his salary and workmen‟s compensation benefits, and maintained a role in disciplining and terminating him. Accu also played a part in Claudio‟s training and appeared on his identification card, and Accu employees were distinguishable from TBC employees at the plant due to different uniforms.
However, the law is clear that the considerations emphasized by MGS are of limited weight. "The payment of wages is not a decisive factor," nor is who does the hiring. Venezia v. Phila. Elec. Co., 177 A. 25, 26 (Pa. 1935). Furthermore, when one employer‟s activities are "confined to seeing that the men were on hand and checking the time they worked," that is "far from indicating that [it has] any control or right of control over them as to the manner in which they [do] their work." Id. Along those same lines, other cases have noted that "record-keeping and insurance coverage functions are peripheral matters which do not control the determination" of who is a plaintiff‟s employer, and that "under the Workmen‟s Compensation Act, the fact that the "lending employer‟ pays for Workmen‟s Compensation insurance is no impediment to finding the "borrowing employer‟ to be immune from suit." Supp v. Erie Ins. Exch., 479 A.2d 1037, 1040-41 (Pa. Super. Ct. 1984).*fn12 Thus even though Accu hired and paid Claudio, and even though Rasheed took his attendance and recorded his time, this arrangement does not compel the conclusion that TBC cannot be Claudio‟s employer for purposes of immunity under the Workmen‟s Compensation Act.
Rather, the overriding consideration is who could control the work to be done and the manner of performing it, rights that TBC indisputably held. JFC Temps, Inc. v. Workmen's Comp. Appeal Bd., 680 A.2d 862, 864-65 (Pa. 1996); see also Pryce v. D. Jackson & Assocs., No. 95-4417, 1997 U.S. Dist. LEXIS 8842, at *15-16 (E.D. Pa. June 23, 1997) (rejecting "plaintiff‟s contention that other factors, such as hiring, right to terminate employment and payment of wages and compensation, should be considered in determining plaintiff‟s status as an employee" and concluding that defendant‟s "right to control plaintiff‟s performance is so clear that additional factors, which might be relevant to establishing an employment relationship in a more questionable situation, cannot overcome our legal conclusion that an employment relationship existed between [plaintiff and defendant] at the time of the accident."). By creating assignments for Claudio and instructing him how to accomplish them, TBC exercised the dispositive control.
The borrowed employee doctrine thus indicates that TBC was Claudio‟s employer. As a result, pursuant to the Workers‟ Compensation Act, TBC is immune from common law liability and cannot be held responsible to MGS for indemnity or contribution.
In response to TBC‟s Motion for Summary Judgment, MGS argues primarily that TBC should be judicially estopped from asserting that it was Claudio‟s employer.
"Under the doctrine of judicial estoppel, a court can defend the
integrity of the judicial process by barring a party from taking
contradictory positions during the course of litigation." GI Holdings,
Inc. v. Reliance Ins. Co., 586 F.3d 247, 261 (3d Cir. 2009). "Though
there is no rigid test for judicial estoppel, three factors inform a
federal court‟s decision whether to apply it: there must be (1)
irreconcilably inconsistent positions; (2) adopted in bad faith; and
(3) a showing that estoppel addresses the harm and no lesser sanction
is sufficient." Id. at 262 (internal quotations omitted).*fn13
Bad faith for judicial estoppel purposes has been defined as
an "intent to play fast and loose with the court," Ryan Operations
G.P. v. Santiam-Midwest Lumber Co., 81 F.3d 355, 361 (3d Cir. 1996),
and therefore does not exist when "inconsistent positions are asserted
in good faith or through inadvertence," In re Chambers Dev. Co., 148
F.3d 214, 229 (3d Cir. 1998). Bad faith is also typically not found
when the inconsistent positions advanced represent legal theories
rather than factual matters. See Palcsesz v. Midland Mut. Life. Ins.
Co., 87 F. Supp. 2d 409, 413 (D.N.J. 2000) ("[C]courts have been
reluctant to apply judicial estoppel where a statement contains a
legal conclusion, as distinguished from a purely factual
inconsistency." (citing Cleveland v. Policy Mgmt. Sys. Corp., 526 U.S.
795 (1999))); see also Lowery v. Stovall,92 F.3d 219, 224 (4th Cir.
1996) ("[T]he position sought to be estopped must be one of fact
rather than law or legal theory."). Finally, "a party has not
displayed bad faith for judicial estoppel purposes if the initial
claim was never accepted or adopted by a court or agency." Montrose
Med. Grp. v. Bulger, 243 F.3d 773, 778 (3d Cir. 2001); see also G-I
Holdings, 586 F.3d at 262 ("J]udicial estoppel is generally not
appropriate where the defending party did not convince [a court or
agency] to accept its earlier position.").*fn14 As an
overarching principle, "judicial estoppel is an extraordinary remedy
to be invoked when a party‟s inconsistent behavior will otherwise
result in a miscarriage of justice." Ryan, 81 F.3d at 365 (internal
In this case, judicial estoppel would be inappropriate. Admittedly, TBC has advanced inconsistent positions, writing to the Workers‟ Compensation Judge that it was not Claudio‟s employer while asserting now that it was Claudio‟s employer. However, there is no indication of bad faith, or an intent to play fast and loose with the court, on the part of TBC. Rather, TBC has suggested that it changed its position in light of facts uncovered through discovery, indicating good faith or inadvertence. See Mem. Supp. Mot. Summ. J. 12. Furthermore, assertions as to TBC‟s status as Claudio‟s employer represent largely legal conclusions, making judicial estoppel all the less appropriate in this situation. Finally, TBC‟s previous position that it was not Claudio‟s employer was never accepted or adopted by any tribunal. Instead, Claudio withdrew his claim, and the Workers‟ Compensation Judge issued an order giving effect to that request. In sum, there is no evidence of bad faith on the part of TBC, and this case does not merit the invocation of an extraordinary remedy to prevent a miscarriage of justice.
In conclusion, TBC should not be judicially estopped from asserting that it was Claudio‟s employer for purposes of Workers‟ Compensation Act immunity. Rather, the evidence indicates that TBC was Claudio‟s employer and is entitled to such immunity.
For the foregoing reasons, I will grant TBC‟s Motion for Summary Judgment.
ANITA B. BRODY, J.
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