Know Your Client’s Special Preferences

For controverted workers’ compensation claims in New York, the issue of general versus special employment can be raised by your client as a defense to liability. The issue of general versus special employment usually arises in circumstances when the claimant is hired and paid by one employer but works at the location and under the direction of another employer. For instance, a claimant who works for a temporary staffing agency and is placed at assignments with several employers and is then injured at the site of one of his job placements.

This defense is commonly raised by the general employer defendant in an attempt to shift some or all of the liability for the claim to the special employer. However, the issue can be raised by the claimant or the Judge when appropriate. No matter how this defense might arise, if you represent the “general” defendant employer, it is important to know your client’s preferences regarding the use of this defense in workers’ compensation claims. While this defense, if successful, may limit your client’s liability in a particular claim, it only limits your client’s liability by placing liability on another “special” employer. This shifting of liability could lead to a damaged business relationship between your client and the “special” employer who is found liable in that claim.

In almost all scenarios where your client, the general employer, has a pre-existing relationship with the potential special employer, your client probably wants to maintain that business relationship beyond the litigation of one particular workers’ compensation claim. For example, your client, the staffing agency, wants to maintain its relationships with its own clients, the employers with whom employees of the staffing agency are placed for work. Your client’s short-term interests may be served by limiting its liability in one particular workers’ compensation claim, but your client’s long-term interests will be damaged if a “special” employer is upset by being found liable for a particular workers’ compensation claim and severs its relationship with your client for future placement of employees.

If your clients include staffing agencies, you cannot escape this issue. But this issue can arise in other scenarios where the claimant is hired by one employer but for all intents and purposes “works” for another employer. A good clue that you may have a general/special defense looming in a controverted claim would be when you represent the employer who hired and paid the claimant, but you start to realize that all of the potential witnesses, such as the alleged witness to the accident itself or the alleged witness to whom notice was provided, work for another employer who is not your client. This scenario can come up commonly in construction and merchandising/retail settings.

The key is to know your client’s preferences before commencing litigation on this issue. In my experience, staffing agencies will prefer to maintain their business relationship with their clients and therefore do not necessarily want to raise this as a defense to liability. This is information you need to know in advising your client on the compensability of any given claim and your client’s chances of success if the claim is controverted. Furthermore, if your client has confirmed that this defense is not in the playbook, you can steer your client towards in-house counsel or employment counsel who may be able to assist your client in including precise contractual language confirming which employer is liable when future workers’ compensation claims arise between your client and your client’s clients.

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