Who is responsible for the negligence of the “company man” on the well? | Gray Reed

Parkman v. W&T Offshore, Inc., et al features two contractors playing hot potato over liability for a company man’s alleged negligence. The takeaway: Write your Master Service Agreement to address your liability concerns, and then pay attention to what really happens on the location, regardless of what the MSA says. (And good luck monitoring that second factor!)

Brubaker was a drilling consultant and payroll employee of defendant AGR, assigned to work as a company man for W&T pursuant to a MSA. Helmrich & Payne was drilling a well for W&T offshore Louisiana. Brubaker’s job was to monitor H&P’s drilling operations on behalf of W&T.

Plaintiff Parkman was a floorhand/roughneck employed by H&P who suffered a serious accident resulting in paraplegia.

The borrowed employee under Louisiana law

Were W&T and/or AGR vicariously liable for Brubaker’s negligence? AGR contended that Brubaker was a borrowed employee of W&T and as a result no AGR employee was involved in the incident and thus AGR was not vicariously liable.

As a matter of law, whether Brubaker was a borrowed employee of W&T and or a dual employee of AGR and W&T depended on nine so-called Ruiz factors:

  1. Who had control over the employee and the work he was performing beyond mere suggestion of details or cooperation?
  2. Whose work was being performed?
  3. Was there an agreement, understanding, or meeting of the minds between the original employer and the borrowing employer?
  4. Did the employee acquiesce in the new work situation?
  5. Did the original employer terminate his relationship with the employee?
  6. Who furnished tools and place for performance?
  7. Was the new employment over a considerable length of time?
  8. Who had the right to discharge the employee?
  9. Who had the obligation to pay the employee?

No single factor is decisive but the first is the most critical.

You can’t rely only on the MSA

The parties cannot rely only on the terms of the MSA to answer the question. Regardless of contract language favoring one result or another, the reality at the worksite and the parties’ actions in carrying out a contract can impliedly modify, alter, or waive express contract provisions. The terms of the agreement alone are not dispositive and can be overcome for summary judgment purposes by other factors.

In deciding a motion for summary judgment from AGR, the court concluded that the non-contract record evidence (ie, what was really happening on the platform), in addition to the MSA language, clearly and overwhelmingly pointed to Brubaker’s status as a borrowed employee of W&T. The details of the fact-intensive opinion are less important than the principals involved and won’t be discussed here.

The dual employer doctrine

Under Louisiana’s dual employer doctrine even if Brubaker was W&T’s borrowed employee, a general/lending employer (AGR) that is in the business of lending employees to its customers is solidarily liable for the employee’s torts committed upon third persons.

Parkman’s position was that both the lending and borrowing employers were vicariously liable. The court determined that Louisiana’s dual employer rule applies, AGR would be vicariously liable for Brubaker’s torts regardless of Brubaker’s status as a borrowed employee of W&T.

The federal issue

The court also determined that there was no federal law which was inconsistent with the Louisiana rule such that Louisiana’s dual employer rule did not apply. The Louisiana rule applied.

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