Moonlighting Cop Not Independent Contractor? NC Supreme Court Says Hold on.

The North Carolina Supreme Court has temporarily put the brakes on an appeals court decision that had upset years of workers’ compensation case law on when a moonlighting law officer is considered an independent contractor.

In the case of Stephen Lassiter vs. Robeson County Sheriff’s Department, the state Court of Appeals in December overruled the state’s Industrial Commission. The appeals court found that Lassiter’s injuries, sustained while he was working traffic control for a private company, are the responsibility of both the sheriff and Truesdell Corp., a bridge-building firm.

But Truesdell and its workers’ compensation insurer, The Phoenix Insurance Co., petitioned the high court to step in to prevent the insurer from having to cover medical and indemnity benefits to the injured deputy. The American Property Casualty Insurance Association also filed an amicus curiae brief in the case last week, arguing that the appellate court had made an error and had diverged from accepted precedent.

“By departing from the previously established joint employer doctrine, the Court of Appeals has generated an unclear standard that imposes a significant burden on employers and insurers,” North Carolina attorney Frances Clement wrote in her brief for the APCIA. “Broadening the scope of joint employment increases the potential liability exposure for insurers” and could lead to higher comp costs for employers.

Insurers assess risk based on multiple factors, including the nature of employment relationships. But under the appeals court’s seemingly new standard, insurance companies would have increased risk exposure “because they cannot possibly anticipate all employees who may have joint employment in view of this new interpretation of joint employment,” Clement wrote.

The question of who pays worker’s comp benefits (and faces higher experience modifications) has been an issue in multiple states through the years, especially when law enforcement officers work temporary gigs as security, traffic or crowd-control officers for private firms. In North Carolina, Truesdell and Phoenix Insurance argued, the test for determining who holds liability has been well-settled by the courts since a 1974 decision known as Collins vs. John Paul Edwards.

When a general employer, such as the sheriff’s office, lends an employee to a special employer, the special employer becomes liable for workers’ compensation benefits only if: the employee has contracted with the special employer; the work is essentially that of the special employer; and the special employer has the right to control the details of the work, the bridge builder attorneys noted.

The appellate judges had essentially found that Lassiter had met that test: He had an implied contract with Truesdell, he was performing Truesdell’s assigned duties and Truesdell had control over the work. The bridge company said the court had expanded the test inappropriately.

Lassiter was severely in 2017. Truesdell, an Arizona-based company, was restoring an Interstate 95 bridge in Robeson County, in southeast North Carolina. Truesdell had contracted with officials at a local police department and with the Robeson County Sheriff’s Office to supply officers for traffic control.

Seeing that the job would require more officers, the sheriff’s captain asked deputy Stephen Lassiter if he could work traffic that October night. Shortly after midnight, a pickup truck hit Lassiter, causing extensive injuries to his head, arms, hands and legs. He underwent surgery at least twice and has had extensive treatment and rehabilitation.

Lassiter filed a workers’ compensation claim, listing the Robeson County Sheriff’s Office and Truesdell as the employers. Both denied they were employers.

A deputy commissioner at the North Carolina Industrial Commission found that Lassiter was an employee of the sheriff, but not the bridge company. On appeal, the full Industrial Commission agreed. The sheriff’s office appealed to the state Court of Appeals, arguing that the deputy was an independent contractor, or, barring that conclusion, that he was jointly employed.

The appeals court noted that North Carolina appellate courts had never addressed the question of when an off-duty law officer should be considered an independent contractor.

It’s unclear what happens next, or when the high court will hear an appeal of the lower court’s ruling. Clement and Phoenix attorneys could not be reached for comment Wednesday, but the employer’s brief to the Supreme Court argues that, without a stay, the Industrial Commission would have to enforce the benefits payments to Lassiter.

“Without a stay, enforcement of the opinion and award will require defendants Truesdell to issue lump sum payment for medical treatment and indemnity benefits, which defendants Truesdell will likely never be able to recover,” the Truesdell and Phoenix petition notes.