Martin v. Phillips Petroleum Co.

42 Cal. App. 3d 916, 117 Cal. Rptr. 269, 39 Cal. Comp. Cases 1024, 1974 Cal. App. LEXIS 1279

Opinions

Opinion

DEVINE, J.*

Plaintiff, William J. Martin, and intervener, Hartford Accident and Indemnity Company, appeal from a judgment rendered by the court in the first part of what was scheduled to be a bifurcated trial. The judgment, in favor of Phillips Petroleum Company, defendant, is based on the conclusion that Martin was a special employee of the defendant at the time he allegedly sustained injuries referred to in his complaint. The Hartford Company, as workmen’s compensation insurance carrier for Plant Maintenance, Inc., has paid all of the benefits required by the Labor Code. Plant Maintenance surely was the general employer of Martin, and it is contended by appellants that it was his sole employer. If the court’s finding and conclusion that Phillips was Martin’s special employer at the time of the asserted injury be correct, it follows that plaintiff may not have damages by means of this personal injury action against Phillips. (Lab. Code, § 3601; Sehrt v. Howard, 187 Cal.App.2d 739 [10 Cal.Rptr. 128]; Oxford v. Signal Oil & Gas Co., 12 Cal.App.3d 403 [90 Cal.Rptr. 700]; McFarland v. Voorheis-Trindle Co., 52 Cal.2d 698, 702 [343 P.2d 923].) On the other hand, he would be entitled to workmen’s compensation from either or both employers. (McFarland v. Voorheis-Trindle Co., supra, at p. 702; Oxford v. Signal Oil & Gas Co., supra, at p. 411; National Auto. Ins. Co. v. Ind. Acc. Com., 23 Cal.2d 215, 219 [143 P.2d 481]; Dept. of Water & Power v. Ind. Acc. Com., 220 Cal. 638 [32 P.2d 354].)

The Contract Between Plant Maintenance and Phillips Petroleum

Although the contract names Tidewater Oil Company as one of the parties, it was stipulated that Phillips Petroleum is the successor of Tidewater and that the contract is binding on Phillips. We shall refer to Phillips as a party without further reference to. Tidewater. Plant Maintenance is in the business of supplying manpower to oil refineries and other industries. Plaintiff had been an employee of Plant Maintenance for several years before the accident, but he had worked at the Avon refinery of Phillips for about a year, or perhaps as much as two years, according to his testimony. The terms of the contract are such as obviously to be designed to designate workmen as employees of Plant Maintenance only and to prevent Phillips from being considered a special employer. Thus, the contract provides that Plant Maintenance is not the agent of Phillips but is an independent contractor; that Plant Maintenance maintains complete control over its employees; that this is so even “as an aid to Contractor [Plant Mainte nance],” some of the employees may work solely or partially under the direction or supervision of Phillips; such direction or supervision shall be for contractor’s benefit and account; that contractor shall constantly superintend said work by its own superintendent and instructions given superintendent shall be deemed to have been given to the contractor; and that all the employees shall be deemed to be employees of contractor for all purposes, notwithstanding any finding that their work is wholly or partially under the direction or supervision of Phillips.

Even before considering the factual situation which the trial judge impliedly found to be incompatible with the written contract, we note that the labored effort to maintain independence of the two potential employers in itself gives evidence that the independence is fictitious. For example, how can it be believed that work done by laborers shall be for Plant Maintenance’s benefit, except of course for the fact that Plant Maintenance expects to be paid by Phillips? What other benefit does Plant Maintenance gain from work done at an oil refinery? And by brief reference to the facts as described below, what does an employee whose work calls for using a jack hammer have to do with the interest of a general supplier of labor? Further, the provision in the contract that the employees shall be deemed to be those of Plant Maintenance, notwithstanding any finding that the work is performed under the direction or supervision of Phillips, appears to be an attempt to control the status of the various parties despite a finding by a court or by the Workmen’s Compensation Appeals Board. The contract cannot affect the true relationship of the parties to it. Nor can it place an employee in a different position from that which he actually held. (Mark Hopkins, Inc. v. Cal. Emp. etc. Com., 86 Cal.App.2d 15 [193 P.2d 792]; Stewart & Nuss v. Ind. Acc. Com., 55 Cal.App.2d 501, 506 [130 P.2d 985].)

We find nothing in the nature of estoppel to prevent Phillips from asserting the true situation. It does not seem that the case was tried on the theory of estoppel. The record contains no request for a finding on the subject of any intention on the part of respondent that its conduct should be acted upon or that appellant Martin himself relied upon any deceptive representation or concealment under a duty to speak or to the injury to appellant Martin. Appellants relied on the written contract and on such facts, as set forth below, which would favor their position, contending at all times, as they do on appeal, that Plant Maintenance was the sole employer of Martin. The essential elements of estoppel are lacking. (Crestline Mobile Homes Mfg. Co. v. Pacific Finance Corp., 54 Cal.2d 773 [8 Cal.Rptr. 448, 356 P.2d 192].)

Although a conclusion that Martin was a special employee of Phillips cannot be squared with the terms of the written contract, it does, as we view the totality of the circumstances, comport with the law and the decisions. The workman is assured of recovery for an industrial injury from both employers, and although in this particular case the general employer’s carrier has paid the benefits, the special employer was likewise liable. The true relationship between the parties, rather than the professed one, should be held to establish the rights and dúties of the parties. Although the Legislature has recognized, as a practical matter, the respective liabilities of insurance carriers in a general-special employer situation, by providing in Insurance Code section 11663 that the insurer of the general employer is liable for the entire cost of compensation unless the special employer had the employee on his payroll at the time of injury, the section does not purport to abrogate the rule of liability of full employers. (Argonaut Ins. Exch. v. Ind. Acc. Com., 154 Cal.App.2d 703 [316 P.2d 759]; McFarland v. Voorheis-Trindle Co., 52 Cal.2d 698 [343 P.2d 923].) Thus the employee has the benefit of having the special employer as an additional party responsible for any industrial injury which he suffers on that employer’s job. If there be serious and willful misconduct on the part of the special employer (which creates a liability which cannot be insured against), no doubt he has the right to an increased award against the special employer under Labor Code section 4553.

The Accident

The injury took place during plaintiff’s lunch hour. He had gone to a locker room which, although it was on Avon’s premises, was provided by Plant Maintenance. It is alleged that the defendant negligently maintained the lockers within the room, so that they fell on plaintiff. We do not find merit in the suggestion by appellant that because he had retired to the locker room for luncheon, he was not under the direction of the special employer. The ordinary rule as to breaks for luncheon, etc., applicable to workmen’s compensation cases, obtains. (See Herlick, Cal. Workmen’s Compensation Law Handbook, § 10.12, p. 259.)

The Contract of Hire

Although Phillips did not expressly make a contract of employment with Martin, Martin’s consent may be Inferred from his acceptance of the special employer’s control and direction. (1A Larson’s Workmen’s Compensation Law, § 48.10.) The long term during which Martin did the work of Phillips confirms this inference. Martin did not know of the contract between Plant Maintenance and Phillips, and knew that he was on the payroll of the former, but it is evident that he knew the general situation because he testified, “when I was hired out I was hired out to work at Shell and then I came to Phillips and I stayed.”

Special Employment

An analysis of the various elements which, taken as a whole, determine the relationship of Martin to Phillips convinces us that Martin was a special employee.

1. Payroll. Martin was on the payroll of Plant Maintenance. Withholding of taxes and social security contributions was handled by Plant Maintenance. This is relatively unimportant. No doubt the service rendered Was of value to Phillips, but it has nothing to do with the duties performed by the employee.

2. Duration. Martin worked for Phillips without interruption for at least a year, and possibly two, a factor tending to show special employment. (Oxford v. Signal Oil & Gas Co., supra, 12 Cal.App.3d at p. 408.)

3. Nature of the work. Martin had two categories of employment: laborer and brick mason. Just before the accident, he had been using a jack hammer, which he was permitted to do by union rules in his capacity as brick mason. The relatively unskilled nature of the services which would make them readily subject to control by Phillips’ -foreman also tends to show special employment. (Oxford v. Signal Oil & Gas Co., supra, at p. 408; Housewright v. Pacific Far East Line, Inc., 229 Cal.App.2d 259, 266 [40 Cal.Rptr. 208].) As said above, the work properly performed was of benefit to Phillips, and only in a general way unrelated to the performance of the details of the task was it of use to Plant Maintenance.

4. Work tools. Basically, all of the tools, including hard hats, and in particular the jack hammer which plaintiff had been using, were supplied by Phillips, another indication of special employment.

5. Badges. Plant Maintenance employees were issued badges, which they did not always wear, to distinguish them from employees on the Phillips payroll. This factor may have some slight bearing against the proposition of special employment, but there is nothing in the record to show of what practical use the badges were in the performance of the required tasks.

6. Check-in and assignments. Plant Maintenance kept a foreman of its own on the refinery premises, but all he did was to check-in the Plant Maintenance employees as they appeared and to hand them their day’s assignments, which the foreman in turn had received from Phillips. Plant Maintenance’s foreman had nothing to do with the details or quality of the work.

7. Right to terminate. The right to terminate employment is a significant factor in showing the right of control. Although Phillips did not have the right to fire Plant Maintenance men and did not attempt to do so, it was testified by Plant Maintenance’s officer that on request of Phillips to terminate an employee, “we got him out.” A Phillips foreman testified that he knew of no instance where Plant Maintenance refused to remove an employee from the job at Phillips’ request. Indeed, it would seem unlikely that Plant Maintenance, if it hoped for a renewal of the contract, would insist that an unsatisfactory employee be retained on the Phillips job. It is the right to terminate the special employment relationship and not the right to discharge the employee outright that is important. (Oxford v. Signal Oil & Gas Co., supra, 12 Cal.App.3d at p. 410; Sehrt v. Howard, supra, 187 Cal.App.2d at p. 743.) If grievances by a union were presented, the arbitration was conducted with Plant Maintenance as a party. But this result naturally flows from its capacity as general employer and does not have much significance in determining the relationship of Martin to Phillips.

8. Control and supervision of the work. This is the most important factor. The record, although brief, is replete with testimony that control and supervision of the actual work was done by Phillips’ foremen. Phillips laid out the work to be done. Phillips supervised the details and quality of the tasks performed. The fact that the general employer has residuary control, can recall the employee at will, and can discharge the employee or give him other orders is not the test of special employment. The test is whether the special employer has the right to control the details of the work for which the employee was the “lent” or “loaned” employee. (Sehrt v. Howard, supra, 187 Cal.App.2d at p. 743.)

9. Belief of the parties. As in the Oxford case, Phillips’ only representative to testify knew that he could not discharge employees, but he also believed that he had the right to terminate their special employment by merely notifying Plant Maintenance. He understood that he had the right to control the specifics of the work. Although Martin knew nothing of the contract between Plant Maintenance and Phillips, and knew that he was on the former’s payroll, he was aware of course that his day by day and hour by hour work was under the direction of Phillips.

In conclusion, we are of the opinion that the correct criterion is not what sort of arrangement two parties, one of them truly a general employer and the other a special employer, may describe on paper, but what actually is the nature of the transactions and relationship between them and with an employee.

The judgment is affirmed.

Draper, P. J., concurred.

Footnotes

*

Retired Presiding Justice of the Court of Appeal sitting under assignment by the Chairman of the Judicial Council.