Joint Employment and Workers’ Compensation in North Carolina
by Richard Haywood, McAngus Goudelock & Courie, LLC
An NCADA Workers' Compensation Practice Group Article
The issue of joint employment and the lent employee doctrine under North Carolina Workers’ Compensation law is now before the North Carolina Supreme Court. The Court’s decision could have significant implications for both public employers and private contractors who regularly engage the services of off-duty law enforcement personnel.
In Lassiter v. Robeson County Sheriff’s Department, an increasingly common employment scenario is presented. It is a familiar scene: a law enforcement officer directing traffic after a local concert or sporting event, or an off-duty officer providing security outside a downtown bar. In some of these scenarios, off-duty law enforcement officers are working for private businesses. The legal question arises: who is liable when an off-duty officer is injured while performing these duties?
In Lassiter, a large-scale roadwork project required law enforcement officers to direct traffic and ensure safety. The North Carolina Department of Transportation (“NCDOT”) contracted with Truesdell Corporation to perform bridge preservation work on Interstate 95, covering portions of both Cumberland and Robeson Counties. As part of the project, Truesdell was required to retain law enforcement personnel with activated blue lights to manage traffic in accordance with a formal traffic control plan. The plaintiff, a deputy with the Robeson County Sheriff’s Office (“RCSO”), was given the opportunity to work on the project through his department.
While performing traffic control duties, the plaintiff was struck by a vehicle and sustained severe injuries to his head, arms, hands, and legs. He filed a Form 18 with the North Carolina Industrial Commission, alleging that both RCSO and Truesdell were his employers at the time of the injury. Both entities denied the existence of an employment relationship.
The case was initially heard by Deputy Commissioner Peaslee, who issued an Opinion and Award finding that the plaintiff was an employee of RCSO at the time of injury, and that no employment relationship existed between the plaintiff and Truesdell. Truesdell was dismissed from the case.
On appeal, the Full Commission affirmed the Deputy Commissioner’s findings. RCSO then appealed to the North Carolina Court of Appeals.
The Court of Appeals addressed two principal issues: (1) whether the plaintiff was an employee or an independent contractor, and (2) whether a joint employment or lent employee relationship existed between the plaintiff and Truesdell.
The threshold question in such cases is whether a valid employer-employee relationship existed at the time of the injury. The court applied the factors established in Hayes v. Board of Trustees, 224 N.C. 11, 29 S.E.2d 137 (1944), which were later assessed, in a similar context, by the North Carolina Supreme Court in State v. Gaines, 332 N.C. 461, 421 S.E.2d 569 (1992). In Gaines, the Court held that police officers retain their law enforcement status at all times—regardless of whether they are “on duty” or “off duty”—when performing duties to enforce the law or protect the public. Id. at 466, 421 S.E.2d at 571.
Applying the Hayes factors, the Court of Appeals found that the plaintiff was hired specifically because of his status as a sworn officer and used his training and experience in law enforcement to manage traffic. The court determined that the plaintiff was not an independent contractor but was acting as an employee of RCSO at the time of the injury.
The Court then turned to the question of whether a joint employment or lent employee relationship existed between the plaintiff and Truesdell. In Whicker v. Compass Group USA, Inc., 246 N.C. App. 791, 784 S.E.2d 564 (2016), the Court of Appeals set forth a three-part test for determining joint employment:
1. An express or implied employment contract must exist between the plaintiff and the alleged employer;
2. The employers must be engaged in the same or similar business; and
3. Both employers must exercise control over the manner and method of the plaintiff’s work.
Id. at 797, 784 S.E.2d at 569.
In Lassiter, the Court of Appeals found that an implied employment contract existed between the plaintiff and Truesdell. Although RCSO retained direct supervisory control, Truesdell had the authority to request, schedule, and directly pay law enforcement officers—satisfying the first prong of the Whicker test.
Regarding the third prong—control—the court found that both RCSO and Truesdell exercised simultaneous supervision. While on-site supervision came from RCSO superior officers, Truesdell retained functional control through its authority to determine the number of officers needed, to develop traffic control plans, and to relay those plans to supervisors. This control was sufficient to meet the third prong of Whicker.
However, the court departed from existing precedent on the second prong. The Full Commission had determined that the plaintiff was engaged in law enforcement duties, not construction work, and therefore RCSO and Truesdell were not “engaged in the same or similar business.” Lassiter, 896 S.E.2d at 294. The Court of Appeals rejected this narrow reading, modifying the second prong to require only that “the service being performed by the plaintiff for each employer must be the same or closely related.” Lassiter, 896 S.E.2d at 303 04. The court reasoned that although the plaintiff’s work was law enforcement in nature, it was undertaken in direct support of Truesdell’s construction project, making the services between RCSO and Truesdell “closely related.” Lassiter, 896 S.E.2d at 304.
As a result, the Court of Appeals concluded that a joint employment relationship did exist and reversed the Full Commission’s Opinion and Award.
The North Carolina Supreme Court will now weigh in on these significant issues. The ruling could reshape how joint employment is defined in the state—particularly as it applies to off-duty law enforcement officers performing functions for private entities.
If the Supreme Court affirms the Court of Appeals’ modified test, it would significantly expand the scope of joint employment. The precedent in Whicker requires: (1) an express or implied contract; (2) that the employers be engaged in the same or similar work; and (3) shared control over the employee’s duties. A broader reading of the “similar work” requirement would expose private companies to increased liability for injuries suffered by off-duty law enforcement officers operating in quasi-public roles.
