A recent case, Lou v. Lopinto, highlights the need for employers and property owners to carefully evaluate potential relationships with “borrowed employees”, i.e. contractors or temporary workers, to avoid being held vicariously liable for the borrowed employee’s actions while they are working for them.

What is a Borrowed Employee?

In some cases, a worker might formally and regularly work for one employer but is temporarily under the control and direction of a different employer. This temporary arrangement is often called a “borrowed employee.” Under the “borrowed employee” doctrine, the borrowing employer can be held liable for the worker’s actions if they exert sufficient control over how and when the work is performed, among other factors as discussed below. Companies who hire off-duty law enforcement officers to work “private detail” as security guards should be aware of this doctrine to reduce potential vicarious liability risks in their contractual agreements.

A recent case, Lou v. Lopinto, offers a good example of how these relationships are analyzed by Louisiana courts.

Lou v. Lopinto: The Facts

In Lou, the plaintiffs sought to hold a shopping center and its owner (“the shopping center defendants”) liable for the actions of an off-duty deputy sheriff working private detail. The deputy had been engaged by the shopping center defendants to provide private security at a shopping center. The plaintiffs alleged that the shopping center defendants were directly negligent and vicariously liable for the actions of the deputy, which allegedly resulted in the death of a 16-year-old. More specifically, the plaintiffs contended that the deputy was a “borrowed employee,” a designation that could make the shopping center defendants liable for the deputy’s actions.

The shopping center defendants filed a Motion for Summary Judgment asking the Court to determine that no reasonable jury could find that the deputy was a “borrowed employee.”

The Ruiz Factors

According to Fifth Circuit precedent, vicarious liability under the “borrowed employee” doctrine primarily depends on the existence of a pseudo-employer-employee relationship, which is fundamentally tied to the right of control and direction of the employee’s work “beyond mere suggestion of details or cooperation.” In Ruiz v. Shell Oil Co., the Fifth Circuit set forth the following nine factors that courts should consider when determining whether a person qualifies as a borrowed employee:

1. Who has control over the employee and the work he is performing, beyond mere suggestion of details or cooperation? (Primary factor)
2. Whose work is being performed?
3. Was there an agreement, understanding, or meeting of the minds between the original and 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?

The Court’s Analysis of the Ruiz Factors

Under these factors, control over the employee and the work he performs is the most important factor in this analysis. In the Lou case however, this factor was not instructive, the Court finding it to be overall neutral. While the shopping center defendants had some control (setting hours, location, and the ability to terminate the security detail), the general policies and procedures governing the deputy’s work were issued by the sheriff’s office.

Regarding the second factor, as the work being performed by the deputy was directly benefiting the shopping center defendants by ensuring the safety of their property, patrons, and tenants, this factor weighed in favor of a borrowed employee relationship.

For the third factor, there was no explicit agreement characterizing the deputy as a “borrowed” employee. Although the court noted that actions, not explicit terms, govern this factor, it ultimately found that it weighed against a borrowed employee relationship.

The deputy knowingly and voluntarily worked the security detail; the fourth factor weighed in favor of the borrowed employee relationship.

Regarding the fifth factor, “the emphasis when considering this factor should focus on the lending employer’s relationship with the employee while the borrowing occurs.” As the sheriff’s office maintained its relationship with the deputy and exercised nominal control over him while he worked security detail for the shopping center defendants, this factor weighs in favor of a borrowed employee relationship.

While the shopping center defendants supplied the location for the work, as well as a cell phone, the sheriff’s office supplied all other tools necessary for the security detail. The sixth factor weighed against a borrowed employee relationship.

For the seventh factor, what constitutes a “considerable length of time” is not clearly defined, which the Court acknowledges. However, a prior Fifth Circuit case found that as little as a year and a half was enough to satisfy this element and weigh in favor of borrowed employee status. As this deputy had worked this detail for four years, the seventh factor weighed in favor of borrowed employee status.

The shopping center defendants had the authority to terminate the deputy’s assignment to their security detail. The Court found the eighth factor supported a borrowed employee relationship.

Finally, regarding the ninth factor, the plaintiffs presented evidence that the deputy was paid by the shopping center defendants directly via check. As such, this factor weighed in favor of a borrowed employee relationship.

In the instant case, the Eastern District of Louisiana found that factors 2, 4, 5, 7, 8, and 9 weighed in favor of the existence of a “borrowed employee” status for the deputy; factors 3 and 6 weighed against it; and factor 1, the most important factor, was overall neutral. As such, the Court found that a reasonable jury could conclude that the deputy was a “borrowed employee,” and denied the Motion for Summary Judgment.

The Takeaway

For employers and property owners, this case highlights the need to carefully evaluate potential relationships with contractors or temporary workers. The court’s reliance on the Ruiz factors also demonstrates that no single element is dispositive, even though the first factor is primary. Rather, Louisiana courts will examine the totality of the circumstances to assess control and the nature of the working relationship. Property owners and employers should be mindful of these factors to mitigate potential vicarious liability risks in their contractual arrangements.