

Opinion issued July 21, 2011
 

In The
Court of
Appeals
For The
First District
of Texas
————————————
NO. 01-10-00352-CV
———————————
Antonio Lomeli, Appellant
V.
Southwest
Shipyard, L.P.,
Appellee

 

 
On Appeal from the 113th District Court
Harris County, Texas

Trial Court Case No. 2009-17919
 

 
O P I N I O N
          Appellant,
Antonio Lomeli, sued Southwest Shipyard, L.P. (“Southwest”) for negligence
after he fell into an open barge hatch and seriously injured his left leg.  Southwest moved for summary judgment,
asserting the exclusive remedy provision of the federal Longshore and Harbor
Workers’ Compensation Act (“LHWCA”) as an affirmative defense.  The trial court rendered summary judgment in
favor of Southwest.  In one issue, Lomeli
contends that the trial court erred in rendering summary judgment because (1)
Southwest failed to produce its contract with Lomeli’s original employer, which
requires an assumption that the terms of the contract negated any intent for
Lomeli to become Southwest’s “borrowed employee,” and (2) Lomeli presented
evidence raising fact issues on multiple factors of the borrowed employee test.
          We
affirm.
Background
          Labor
Ready Central, Inc. (“Labor Ready”) provides employees to other companies on a temporary
basis.  Southwest, a company that cleans,
refurbishes, and repairs barges, contacts Labor Ready when it needs additional
employees to complete its work.  In
November 2007, Labor Ready hired Lomeli, a welder, to work at Southwest.  Lomeli worked at Southwest for approximately
one month without incident.  On December
18, 2007, a Southwest employee asked Lomeli to assist in pulling a piece of a
barge back to the dry dock.  As Lomeli
walked backwards on the deck of the barge, he fell into an open hatch and
seriously injured his left leg.  Lomeli
received worker’s compensation benefits from Labor Ready as a result of this
incident.
          Lomeli
sued Southwest for negligence, alleging, among other things, that Southwest
failed to maintain safe premises, failed to warn of hidden hazards, failed to
cure hidden hazards, and failed “to intervene . . . when it
knew that others were acting improvidently.” 
Southwest answered and asserted that Lomeli’s claim was barred under the
exclusive remedy provision of the LHWCA because Lomeli was Southwest’s
“borrowed employee,” and, thus, Lomeli could only recover worker’s compensation
benefits under the Act and could not bring a tort action against Southwest.
          Southwest
moved for traditional summary judgment on its exclusive remedy affirmative
defense.  Southwest contended that Lomeli
was its borrowed employee under the nine-factor test used by the Fifth Circuit because
Southwest employees controlled the means and ends of Lomeli’s work while he was
at Southwest, Lomeli was performing Southwest’s work at the time of the
accident, Southwest and Labor Ready agreed that Lomeli would be under
Southwest’s direction and control while working at Southwest’s facility, Labor
Ready had no control over Lomeli’s work at Southwest, Southwest could terminate
its work relationship with Lomeli, and Labor Ready paid Lomeli based on work
tickets verified daily by Southwest.
          As
summary judgment evidence, Southwest attached the affidavit of Wayne Herman,
Southwest’s Vice-President of Administration, and the transcript of Lomeli’s
deposition.  Herman averred that, based
on its agreement with Southwest, Labor Ready provides workers’ compensation
coverage for all Labor Ready employees assigned to work at Southwest.  A portion of the fees paid by Southwest to
Labor Ready covers this expense.  Herman
stated that although Labor Ready workers receive their paychecks from Labor
Ready, “that is the extent of Labor Ready’s involvement with the workers while
they are at Southwest’s facility.”  These
workers are paid from funds provided to Labor Ready by Southwest.  Herman averred that Labor Ready workers are
assigned to Southwest for an indefinite period, and Southwest has the right to
terminate its relationship with the assigned workers.  Herman additionally averred that:
[Lomeli] reported to the
[Southwest] facility for his day-to-day work activities and was supervised by
[Southwest] personnel.  While working at
the [Southwest] facility, [Lomeli] was expected to follow and abide by all
[Southwest] policies and procedures. 
During this course of his employment at [Southwest], [Lomeli] used
[Southwest] equipment and materials to complete those tasks to which he was
assigned by [Southwest] personnel.  All
work that [Lomeli] completed while at the Southwest facility was related to the
repair of barges for the benefit of Southwest Shipyard.  [Lomeli] was expected to complete the tasks
in the manner approved by [Southwest]. 
On a daily and ongoing basis, [Lomeli] received his daily work orders
from and was under the control, supervision and direction of [Southwest]
supervisory personnel.
 
Herman concluded that “[f]or all intents and
purposes,” Labor Ready workers assigned to Southwest were employees of
Southwest.
          In
his deposition, Lomeli testified that he applied for work at Labor Ready
specifically “to get the job at Southwest Shipyard.”  Lomeli started working at Southwest on
November 13, 2007, and he initially arrived at Southwest for the afternoon
shift at the direction of Labor Ready.  Lomeli
testified that Labor Ready employees told him to report to Southwest, but once
he arrived at Southwest, no Labor Ready employees told him where to weld or
what work to do at Southwest’s facility. 
Lomeli stated that only Southwest employees supervised him and his work while
he was at Southwest.  He also stated that
Labor Ready provided his safety glasses and hard hat, that he owned his own life
vest and safety gloves, and that Southwest provided the welding machine, the
“rods” necessary for welding, and “anything else [Lomeli] needed to use.”  According to Lomeli, a Southwest supervisor verified
the number of hours that he worked and signed his work ticket at the end of
every day.  Lomeli then provided these
tickets to Labor Ready for payment.  He
agreed that if a Southwest employee did not sign his work ticket, he would not
get paid for the work that he had done that day.  Lomeli stated that “[t]he job I was doing was
for Labor Ready,” but he also agreed that he worked at Southwest fixing barges
and that that “was Southwest Shipyard’s business.”  Lomeli agreed that he was “working on the
3:30 shift because Southwest Shipyard wanted [him] to be there for a 3:30
shift.”  Lomeli further agreed that he
understood that he would continue to work at Southwest until “somebody at
Southwest Shipyard felt that they didn’t need [him] anymore.”
          Lomeli
also testified that Labor Ready was his employer and that he never felt as
though he was working for Southwest.  He stated
that if a Labor Ready employee had visited Southwest and told him to do
something, he would have followed the Labor Ready employee’s instructions even
if those instructions conflicted with instructions from a Southwest
employee.  Lomeli believed that only
Labor Ready could fire him and that Labor Ready could, at any time, tell him to
stop working at Southwest.
          In
response to Southwest’s summary judgment motion, Lomeli argued that all nine
borrowed employee factors either favored him or were neutral, and, thus, he
raised a fact issue regarding whether he was Southwest’s borrowed
employee.  As summary judgment evidence,
Lomeli attached the transcript of his deposition, the deposition of Mark
Aguilar, Southwest’s Health and Safety Supervisor, the deposition of Maria
Davila, Southwest’s Human Resources Manager, and Southwest’s discovery
responses.
Lomeli contended that Labor Ready,
and not Southwest, had control over him because Labor Ready told him when to
arrive at Southwest, Labor Ready “[told] him what to do,” and he would follow
Labor Ready’s instructions over Southwest’s instructions if the two conflicted.  Additionally, Davila testified that issues
concerning Southwest employees’ performance come to her attention in her
capacity as Human Resources Manager, but she does not address issues concerning
the performance of Labor Ready employees.
Lomeli also contended that he was
not performing Southwest’s work when he fell because Southwest did not own or
operate barges.  Instead, because Lomeli
was working on a barge owned by Kirby Inland, Lomeli was performing Kirby’s
work at the time of the accident.  Lomeli
also argued that because Southwest had not produced its contract with Labor
Ready during discovery, although Davila acknowledged that she had once seen a
contract between Southwest and Labor Ready, the trial court should apply
spoliation principles and presume that the contract provided that Labor Ready
employees were not considered Southwest’s borrowed employees.
Lomeli argued that there was no
evidence that Southwest considered him to be its employee or that he agreed to
be Southwest’s employee, and he pointed to his testimony that he would follow
Labor Ready’s instructions over Southwest’s instructions as support for this
contention.  He also contended that he
and Labor Ready never terminated their employment relationship:  Lomeli returned to work for Labor Ready after
receiving treatment for his injuries, and Davila testified that Labor Ready
employees remain Labor Ready employees while working at Southwest.  Lomeli also relied on his testimony that
Labor Ready furnished him with safety equipment before he began working at
Southwest.  Lomeli testified that, to his
knowledge, only Labor Ready could terminate his employment.  When asked whether she could terminate a
Labor Ready employee based on performance issues, Davila testified that she is
“not involved with Labor Ready people.”[1]  Furthermore, both Lomeli and Davila testified
that Lomeli was paid by Labor Ready.  Lomeli
concluded that “every factor in the borrowed servant analysis favors [him],”
and, thus, summary judgment was improper.
The trial court rendered summary
judgment in favor of Southwest and dismissed Lomeli’s claims with
prejudice.  This appeal followed.
Standard of Review
          We
review de novo the trial court’s ruling on a summary judgment motion.  Mann
Frankfort Stein & Lipp Advisors, Inc. v. Fielding, 289 S.W.3d 844, 848
(Tex. 2009).  To prevail on a traditional
summary judgment motion, the movant must establish that no genuine issues of
material fact exist and that it is entitled to judgment as a matter of law.  Tex.
R. Civ. P. 166a(c); Little v. Tex.
Dep’t of Criminal Justice, 148 S.W.3d 374, 381 (Tex. 2004).  A defendant may prevail on summary judgment
if it conclusively proves an affirmative defense.  See Rhone-Poulenc,
Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999).  A movant seeking traditional summary judgment
on an affirmative defense has the initial burden of demonstrating its
entitlement to judgment as a matter of law by conclusively establishing each
element of the affirmative defense.  See Chau v. Riddle, 254 S.W.3d 453, 455
(Tex. 2008) (per curiam); see also Tex. R. Civ. P. 166a(b)–(c).  A matter is conclusively established if
reasonable people could not differ as to the conclusion to be drawn from the
evidence.  See City of Keller v. Wilson, 168 S.W.3d 802, 816 (Tex. 2005).
          If
the movant meets its burden, the burden then shifts to the nonmovant to raise a
genuine issue of material fact precluding summary judgment.  See
Centeq Realty, Inc. v. Siegler, 899 S.W.2d 195, 197 (Tex. 1995).  Evidence raises a genuine issue of fact if
reasonable and fair-minded jurors could differ in their conclusions in light of
all of the summary judgment evidence.  Goodyear Tire & Rubber Co. v. Mayes,
236 S.W.3d 754, 755 (Tex. 2007) (per curiam). 
To determine if the nonmovant has raised a fact issue, we review the
evidence in the light most favorable to the nonmovant, crediting favorable
evidence if reasonable jurors could do so, and disregarding contrary evidence
unless reasonable jurors could not.  See Fielding, 289 S.W.3d at 848 (citing City of Keller, 168 S.W.3d at 827).  We indulge every reasonable inference and
resolve any doubts in the nonmovant’s favor. 
See Sw. Elec. Power Co. v. Grant,
73 S.W.3d 211, 215 (Tex. 2002) (citing Sci.
Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997)).
“Borrowed Employee” under the LHWCA
          In
his sole issue, Lomeli contends that the trial court erred in rendering summary
judgment in favor of Southwest because he raised a fact issue regarding whether
he was Southwest’s “borrowed employee,” and, thus, Southwest was not entitled
to summary judgment based on the exclusive remedy provision of the LHWCA.
          Under
the LHWCA, an employer’s liability is limited to workers’ compensation benefits
under the Act, and this remedy is “exclusive and in place of all other
liability of such employer to the employee . . . .”  33 U.S.C.S. § 905(a) (1994); see White v. Bethlehem Steel Corp., 222
F.3d 146, 148 (4th Cir. 2000) (“Covered employees cannot bring a personal
injury action against their employer; their only remedy with regard to their
employer is through the LHWCA.”); Melancon
v. Amoco Prod. Co., 834 F.2d 1238, 1243 (5th Cir. 1988) (“Worker’s
compensation under the LHWCA is the exclusive remedy for an employee against
his employer because the Act bars all common law tort actions against the
employer . . . .”); Gaudet
v. Exxon Corp., 562 F.2d 351, 356 (5th Cir. 1977) (“The LHWCA was designed
to provide an injured employee with certain and absolute benefits in lieu of
possible common law benefits obtainable only in tort actions against his
employer.”).
The definition of “employer” in
section 905(a) “encompasses both general employers and employers who ‘borrow’ a
servant from that general employer.”  White, 222 F.3d at 149; see also Melancon, 834 F.2d at 1243 (“If
Mr. Melancon was found to be the ‘borrowed employee’ of Amoco, he was covered
by the LHWCA, entitling him to workers’ compensation under this Act.”).  “A person can be in the general employ of one
company while at the same time being in the particular employ of another ‘with
all the legal consequences of the new relation.’”  White,
222 F.3d at 149; Hall v. Diamond M Co.,
732 F.2d 1246, 1249 (5th Cir. 1984) (“The borrowed servant doctrine is the
functional rule that places the risk of a worker’s injury on his actual rather
than his nominal employer.  It permits
the injured worker to recover from the company that was actually directing his
work.”) (quoting Baker v. Raymond Int’l,
Inc., 656 F.2d 173, 178 (5th Cir. 1981)).
          To
determine borrowed employee status under the LHWCA, the Fifth Circuit has
established the following nine-factor test:
(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 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?
 
Billizon v.
Conoco, Inc., 993 F.2d 104, 105 (5th Cir. 1993); Brown v. Union Oil Co. of Cal., 984 F.2d
674, 676 (5th Cir. 1993) (citing Ruiz v.
Shell Oil Co., 413 F.2d 310 (5th Cir. 1969)).  Although the Fifth Circuit has repeatedly
stated that “[n]o single factor, or combination of them, is determinative,” the
court has also repeatedly considered the first factor—control over the employee’s work—to be the “central factor” in determining
borrowed employee status.  Brown, 984 F.2d at 676; see also Melancon, 834 F.2d at 1245; Capps v. N.L. Baroid-NL Indus., Inc.,
784 F.2d 615, 616–17 (5th Cir. 1986); Gaudet,
562 F.2d at 356 (“[N]o one of these factors, or any combination of them, is
decisive, and no fixed test is used to determine the existence of a
borrowed-servant relationship.”) (quoting Ruiz,
410 F.2d at 312–13).  The issue of
borrowed employee status is generally a question of law for the trial court,
but “some cases involve factual disputes” and these cases require findings by
the fact-finder.  Brown, 984 F.2d at 677.  If
“sufficient basic factual ingredients are undisputed, the court may grant summary
judgment.”  Capps, 784 F.2d at 617 (citing Gaudet,
562 F.2d at 359).
 
 
1.    
Who had control over the employee and
his work?
          The
Fifth Circuit has often considered this factor to be the “most important”
factor in the borrowed employee analysis. 
See Brown, 984 F.2d at 676 (stating,
“[I]n many of our prior cases, [the Fifth Circuit] has considered the first
factor—control—to be the central factor.”); Capps, 784 F.2d at 617 (calling control
the “most important” of the nine factors); see
also Lockett v. HB Zachry Co.,
285 S.W.3d 63, 75 (Tex. App.—Houston [1st Dist.] 2009, no pet.) (noting, in
general Texas workers’ compensation context, that “[b]orrowed employee status
hinges on whether the other employer or its agents have the right to direct and
control the employee with respect to the details of the particular work at
issue”) (citing St. Joseph Hosp. v. Wolff,
94 S.W.3d 513, 537 (Tex. 2003)).
In Brown, the Fifth Circuit determined that a fact issue existed
regarding which entity controlled the details of Brown’s work because Brown
presented evidence that, at one point during his employment with Union Oil, he
was supervised by and received instructions from an employee of Gulf Inland, his
original employer, and Union Oil presented evidence that only its employees
supervised Brown and gave him his work instructions.  984 F.2d at 677.  The court also noted that Brown had presented
evidence that he followed Union Oil’s instructions “unless the instructions
were contrary to Gulf Inland’s policies or safety practices” and that he was
supposed to call Gulf Inland if Union Oil told him to do something contrary to
Gulf Inland’s policies.  Id.
In Melancon, however, the Fifth Circuit held that Amoco, the
“borrowing” employer, “clearly had control over Melancon and his work” because
Melancon “took orders only from Amoco personnel who told him what work to do,
and when and where to do it.”  834 F.2d
at 1245.  The court observed that Beraud,
Melancon’s original employer, “gave no instructions to Melancon except to go to
the Amoco field and perform the work requested by Amoco personnel.”  Id.;
see also Capps, 784 F.2d at 617
(“Baroid [borrowing employer] clearly had control over Capps and his
work. . . .  Capps also testified that Davis [original
employer] gave him no instructions concerning the work he was to perform at
Baroid.”).
Lomeli contends that this factor
weighs in his favor because Labor Ready told Lomeli what work to do and where
to go to complete his work, provided the work tickets, trained Lomeli on his
welding work, and required Lomeli to follow its instructions in the event of a
conflict between it and Southwest.  He
further argues that he raised a fact issue because Southwest did not exercise
“performance control” over Lomeli, it did not maintain a personnel file on
Lomeli, it did not train Lomeli, and it did not provide a Southwest uniform to
Lomeli.
Lomeli testified that Labor Ready
told him when to be at Southwest on his first day of working there, but, after
this point, only Southwest employees told him what specific work to do and when
and where to do it.  Lomeli stated that
he never worked under the supervision of Labor Ready employees while at
Southwest, and Maria Davila testified that Southwest does not allow employees
of other companies to be supervisors in its shipyard.  Davila also testified that Lomeli was under
Southwest’s supervision and that its employees told Lomeli which shift to work
and which projects to complete.  She also
stated that Southwest supervisors had the right to tell a Labor Ready employee
not to return to the shipyard if they were unsatisfied with the employee’s job
performance.  Although Lomeli speculated
that he would follow Labor Ready’s instructions if they conflicted with
Southwest’s instructions, he presented no evidence beyond this speculation that
Labor Ready ever gave him any specific instructions on what to do at Southwest and
how to do the work that Southwest employees assigned to him, let alone any instructions
that conflicted with Southwest’s instructions.[2]  Instead, the only instructions Labor Ready
gave to Lomeli were to be at Southwest at 3:30 on November 13, 2007, and to perform
the work assigned to him by the Southwest supervisors.  See
Melancon, 834 F.2d at 1245; Capps,
784 F.2d at 617; cf. Brown, 984 F.2d
at 677 (holding that fact issue raised when Brown presented evidence that he
was supervised by employee of his original employer and received instructions
from that employee while working at Union Oil).
We conclude that Southwest “clearly
had control over” Lomeli and the details of his work.  Melancon,
834 F.2d at 1245.  Labor Ready may have
trained Lomeli and he may not have worn a Southwest uniform, but the evidence
is undisputed that only Southwest employees instructed Lomeli regarding what
tasks he was to perform and when and where he was to perform those tasks.  This factor, therefore, weighs in favor of
borrowed employee status.
2.    
Whose work was being performed?
The focus of this factor is whether
the employee’s work furthered the business of the “borrowing” employer.  See
Capps, 784 F.2d at 617 (“All of the work Capps performed furthered Baroid’s
business.  In fact, Davis’ business
existed solely to furnish employees to other companies so that the employee
could perform the work of the borrowing employer.”); see also Melancon, 834 F.2d at 1245 (“[T]here can be no doubt that
Amoco’s work was being performed by Melancon. 
Melancon’s work assisted Amoco in the production of hydrocarbons by
maintaining the production equipment and platforms in the Amoco field.”).
Lomeli contends that he raised a
fact issue on this factor because he testified that he was performing Labor
Ready’s work.  Lomeli is technically
correct: 
Labor Ready’s business was to provide needed temporary workers to other
companies such as Southwest.  See Capps, 784 F.2d at 617 (noting that
original employer’s business was furnishing employees to other companies).  While at Southwest, however, Lomeli worked as
a welder to repair barges at the shipyard. 
Southwest’s business was to clean, refurbish, and repair barges brought
to it by its customers.  By engaging in
welding activities on the barges at Southwest, Lomeli’s efforts furthered
Southwest’s business.  Id.; Melancon,
834 F.2d at 1245.  We conclude that this
factor weighs in favor of borrowed employee status.
3.    
Was there an agreement or understanding between
Southwest and Labor Ready?
 
In several of the Fifth Circuit’s borrowed
employee cases, the contract between the original and borrowing employers
contained language either classifying the temporary employees as “independent
contractors” or specifically providing that the temporary employees were not considered
employees of the purported borrowing employer. 
See Billizon, 993 F.2d at
105–106 (“The service contract governing the relationship between Conoco and
D&C provides that employees of D&C are not employees of Conoco.”) (emphasis in original); Brown, 984 F.2d at 677 (“[Gulf Inland]
specifically agrees that all persons employed by [Gulf Inland] in performing
work covered by this contract . . . are not employees of
Union for any purposes whatsoever.”); Melancon,
834 F.2d at 1245 (“Provision 6 of the ‘Well and Lease Service Master Contract’
does specify that no Beraud employee is to be considered the agent, servant, or
representative of Amoco.”); Gaudet,
562 F.2d at 358 (contract provides that original employer is “independent
Contractor as to all work performed hereunder”).  The Fifth Circuit has held, however, that
worksite realities and the parties’ actions in carrying out the contract can
“impliedly modify, alter, or waive express contract provisions.”  Melancon,
834 F.2d at 1245; see also Billizon,
993 F.2d at 106 (“[T]he reality of the work site and the actions of Conoco and
D&C suggest that [despite the contract provision] the two employers had the
contrary ‘understanding or meeting of the minds.’”).  Furthermore, “parties to a contract cannot
automatically prevent a legal status like ‘borrowed employee’ from arising
merely by saying in a provision in their contract that it cannot arise.”  Melancon,
834 F.2d at 1245.
The Fifth Circuit has also
repeatedly concluded that, even if the contract between the employers includes
a provision prohibiting borrowed employee status, “summary judgment is
appropriate when the remaining factors clearly point to borrowed-employee
status.”  Billizon, 993 F.2d at 106; Brown,
984 F.2d at 678 n.5 (“We recognize and reiterate that the terms of a contract
and the related factual issues do not automatically prevent summary judgment or
direct verdict.  If the remaining
borrowed employee factors overwhelmingly point to borrowed employee status, a
summary judgment or direct verdict is appropriate.”); Alexander v. Chevron, U.S.A., 806 F.2d 526, 529 (5th Cir. 1986)
(“[T]he terms of the contract between the borrowing employer and payroll
employer does not ordinarily provide a sufficient basis to deny summary
judgment when the remaining Ruiz
factors point toward borrowed servant status.”); Gaudet, 562 F.2d at 358–59 (holding, despite contractual language,
that “sufficient basic factual ingredients are undisputed to warrant the entry
of summary judgment”).
Lomeli argues that because
Southwest failed to produce its contract with Labor Ready during discovery, the
trial court should have applied a spoliation presumption that the contract
language specifically negated borrowed employee status.  According to Lomeli, this presumption
precludes summary judgment, regardless of the balance of the remaining borrowed
employee factors.
Even if Southwest failed to produce
the relevant contract governing Lomeli’s employment and, thus, a spoliation
presumption was warranted, this presumption does not automatically preclude
summary judgment.  The Fifth Circuit has
repeatedly found borrowed employee status to exist as a matter of law even when
the contract between the employers provides that the worker is to be classified
as an independent contractor or that the worker is not considered an employee
of the borrowing entity.  See Billizon, 993 F.2d at 106; Melancon, 834 F.2d at 1245 (holding that
parties to contract cannot prevent borrowed employee status from arising by
providing in contract that it cannot arise); Gaudet, 562 F.2d at 358–59; see
also Brown, 984 F.2d at 678 n.5 (stating that terms of contract do not
automatically preclude summary judgment if remaining factors point to borrowed
employee status).  Furthermore, worksite
realities and the parties’ actions can “impliedly modify, alter, or waive express
contract provisions.”  Melancon, 834 F.2d at 1245.
Assuming, without deciding, that
the contract at issue here provided that Labor Ready employees were to be
considered independent contractors and not “employees” of Southwest, Southwest
presented evidence that its supervisors instructed workers such as Lomeli, who
worked alongside “general” Southwest employees, regarding their specific
shifts, their specific tasks, and when and where to complete their assigned
tasks.  Lomeli agreed that while working
at Southwest, he never received any instructions from Labor Ready employees and
that he was never supervised by Labor Ready employees.  Although Mark Aguilar, Southwest’s Health and
Safety Supervisor, testified that Lomeli received most of his training at Labor
Ready, he also testified that upon arriving at Southwest, Lomeli received an
hour of orientation with the Southwest safety division, and Southwest employees
discussed safety policies and procedures with Lomeli.  Regardless of any contractual language
purporting to preclude borrowed employee status, we conclude that both Labor
Ready and Southwest understood that Lomeli would receive his job-related
instructions from Southwest and that Southwest would direct, control, and
supervise the particulars of Lomeli’s job performance.  See
Billizon, 993 F.2d at 106 (“However, the reality of the work site and the
actions of Conoco and D&C suggest that the two employers had the contrary
‘understanding or meeting of the minds.’”);
Melancon, 834 F.2d at 1245 (“Beraud clearly understood that Melancon would
be taking his instructions from Amoco, notwithstanding Provision 6 of the
contract.”).
4.    
Did the employee acquiesce in the new
work situation?
The focus for this factor is not
whether the employee acquiesced in his assignment to the borrowing employer, as
Lomeli contends; rather, the focus is whether “the employee was aware of his
work conditions [at the borrowing employer’s facility] and chose to continue
working in them.”  Brown, 984 F.2d at 678; Melancon,
834 F.2d at 1246 (“[Melancon] knew when he began to work on Amoco’s offshore
platforms in 1977 what his work conditions would be, and he made no complaint
regarding these conditions to Beraud or to Amoco.”).  In Capps,
the Fifth Circuit found that Capps “acquiesced in the new work situation” even
though he was injured at Baroid’s facility on his first day of working there
because Capps “worked for a company that loaned temporary employees.”  784 F.2d at 617.  Thus, Capps knew that Davis, his original
employer, would send him into new work situations, and he “acquiesced to the
fact that Davis would constantly send him into new work situations.”  Id.
 In Brown,
the Fifth Circuit noted that Brown had worked at Union Oil for one month before
his accident, and although most of its cases affirming a borrowed employee
finding involved longer periods of work with the borrowing employer, “one month
is a sufficient amount of time for Brown to appreciate the new work
conditions.”  984 F.2d at 678.
Here, as in Brown, Lomeli worked at Southwest for one month before his
accident.  Lomeli never complained about
his work conditions to either Southwest or Labor Ready.  See
Melancon, 834 F.2d at 1246.  Lomeli’s
subjective belief regarding which entity employed him is irrelevant to the
analysis of this factor.  We conclude, as
the Fifth Circuit did in Brown, that
one month is a sufficient amount of time for Lomeli to appreciate and acquiesce
in his new work conditions at Southwest. 
Brown, 984 F.2d at 678; see also Gaudet, 562 F.2d at 357 (“But
if an employee continues working in a new location, exposed to risks resulting
from the direction and control of the new employer, there must come a time when
policy dictates the LHWCA should apply, and the new employer, and new
co-employees, should no longer be considered third parties but a true employer
and true co-employees, liable only under the LHWCA.”).  This factor, therefore, weighs in favor of
borrowed employee status.
5.    
Did the original employer terminate
its relationship with the employee?
When considering this factor, we
emphasize “the lending employer’s relationship with the employee while the
borrowing occurs.”  Brown, 984 F.2d at 678; Melancon,
834 F.2d at 1246; Capps, 784 F.2d at
618.  This factor “does not require a
lending employer to sever completely its relationship with the employee,
because such a requirement would effectively eliminate the ‘borrowed employee’
doctrine.”  Melancon, 834 F.2d at 1246; Capps,
784 F.2d at 617.  We consider whether the
original employer exercised control over the employee while he worked for the
borrowing employer, whether the original employer placed restrictions on the
borrowing employer regarding the employee’s employment conditions, and whether
the original employer could remove the employee from the job with the borrowing
employer if the employee was needed elsewhere. 
See Brown, 984 F.2d at 679; Capps, 784 F.2d at 618.
Lomeli contends that this factor
weighs heavily against a borrowed employee finding because it is undisputed
that Labor Ready maintained an employment relationship with Lomeli.  Southwest argues that this factor weighs in
favor of a borrowed employee finding because Labor Ready did not direct,
control, or supervise Lomeli while he worked at Southwest.  We agree with Southwest.
The fact that Labor Ready did not
terminate its employment relationship with Lomeli is not determinative and does
not mandate a conclusion that this factor weighs against borrowed employee status.  Brown,
984 F.2d at 678; Melancon, 834 F.2d
at 1246; Capps, 784 F.2d at
617–18.  Although Lomeli testified that
Labor Ready could reassign him to work at another company if necessary, Labor
Ready’s control over Lomeli was otherwise non-existent while he worked at
Southwest.  Labor Ready did not direct or
supervise Lomeli’s actions while at Southwest, and there is no evidence that
Labor Ready placed conditions or restrictions on Southwest’s use of Lomeli at
its facility.  See Capps, 784 F.2d at 618. 
We therefore conclude that while Lomeli worked at Southwest, Labor Ready
had “temporarily terminated its relationship” with and had “nominal” control
over Lomeli, and, thus, this factor also supports borrowed employee
status.  See id.; Melancon, 834
F.2d at 1246.
6.    
Who furnished the tools and place for
performance?
The fact that the original employer
or the employee himself provides some of the equipment used while working at
the borrowing employer’s facility does not preclude a finding in favor of
borrowed employee status.  See Melancon, 834 F.2d at 1246 (holding
that, although Beraud provided welding machine and related equipment, Amoco
provided consumables, transportation, food, lodging, and place of performance,
and, thus, “the balance on this factor is in Amoco’s favor”); Velasco v. Amfels, Inc., 368 F. Supp. 2d
656, 660 (S.D. Tex. 2005) (“The fact that Plaintiff provided much of his own
personal work gear does not indicate that he was not the borrowed employee of
Amfels.”).
Here, Labor Ready provided Lomeli
with safety glasses and a hard hat.  Lomeli
testified that he owned the safety gloves, life jacket, welding mask, “stinger”
for the welding machine, and hammer that he used.  Lomeli also testified that Southwest provided
the welding machine, the necessary rods, and “anything else that [he] needed to
use.”  Mark Aguilar agreed that Labor
Ready provided its employees with general safety equipment; he also testified,
however, that if a Labor Ready employee arrived at Southwest and did not bring
safety equipment, Southwest would provide the needed equipment.  It is undisputed that Southwest provided the
“place for performance.”
Although Labor Ready and Lomeli
himself provided some of the tools and equipment that he needed to weld, this
does not compel a determination that this factor weighs against borrowed
employee status.  See Melancon, 834 F.2d at 1246 (finding factor weighs in favor of
borrowed employee status even though original employer provided welding machine
and related equipment); Velasco, 368
F. Supp. 2d at 660 (finding same when worker provided most of his personal work
gear).  Southwest provided the place for
performance, the welding machine, and the rods for the machine, and it would
provide safety equipment if Labor Ready or Lomeli himself did not otherwise
provide such equipment.  We conclude that
“the balance on this factor” weighs in favor of borrowed employee status.[3]  See
Melancon, 834 F.2d at 1246.
7.    
Was the new employment over a
considerable period of time?
The Fifth Circuit has held that
this factor is significant “only when the [borrowing] employer employs the
employee for a considerable length of time.” 
Capps, 784 F.2d at 618.  “[W]here the length of employment is
considerable, this factor supports a finding that the employee is a borrowed
employee; however, the converse is not true.” 
Id.  In Brown,
the Fifth Circuit concluded that Brown, who worked on Union Oil’s platform for one
month before his accident, did not work at Union Oil for a “considerable” period
of time.  984 F.2d at 679.  Based on the reasoning of Capps, the court held that this factor
was neutral in the borrowed employee analysis. 
Id.; see also Capps, 784 F.2d at 618 (“When the employee’s injury occurs
on the first day, it does not follow that the employee is not a borrowed
employee; therefore, the factor provides a neutral assessment in the instant
case.”).
Here, as in Brown, Lomeli worked at Southwest for approximately one month
before his accident.  Although Lomeli did
not work at Southwest for a considerable period of time, we conclude that this
factor is neutral in the borrowed employee analysis.  See
Brown, 984 F.2d at 679.
 
8.    
Who had the right to discharge the
employee?
The “proper focus” of this inquiry
is not whether the borrowing employer could discharge the employee from his
employment with the original employer, but whether the borrowing employer “had
the right to terminate [the employee’s] services with itself.”  Capps,
784 F.2d at 618 (citing Hebron v. Union
Oil Co. of Cal., 634 F.2d 245 (5th Cir. 1981) (per curiam)); see also Brown, 984 F.2d at 679
(“Although Union did not have the right to terminate Brown’s employment with
Gulf Inland, it had the right to terminate Brown’s work relationship with
Union.  This arrangement is sufficient to
support a finding of borrowed servant status.”); Melancon, 834 F.2d at 1246 (“Amoco also had the right to discharge
Melancon even though Amoco could not terminate Melancon’s employment with
Beraud.  Amoco’s right to terminate
Melancon’s services in the Amoco field satisfied this requirement.”).
Here, it is undisputed that
Southwest could not terminate Lomeli’s employment relationship with Labor
Ready; however, both Wayne Herman and Maria Davila testified that Southwest
could end its relationship with Lomeli at any time.[4]  Herman specifically averred that:  “Labor Ready workers assigned to [Southwest]
are assigned to work at [Southwest’s] facility for an indefinite period of
time.  [Southwest] has the right to
terminate said assigned workers from working at Southwest’s facility.”  Davila testified that if a Labor Ready
employee was performing his assigned tasks at Southwest poorly, this fact would
not be brought to her attention as the Human Resources Manager, but she
unequivocally stated that Southwest supervisors had the right to tell a Labor
Ready employee not to return to the shipyard if they were not satisfied with
the worker’s performance.  Lomeli also testified
that he understood that he would continue working at Southwest until “somebody
at Southwest Shipyard felt that they didn’t need [him] anymore.”  Thus, Lomeli agreed that Southwest could
discharge him when it no longer had a job available for him to perform.
We conclude that although Southwest
could not terminate Lomeli’s employment relationship with Labor Ready, it could
terminate Lomeli’s relationship with itself. 
See Brown, 984 F.2d at 679; Melancon, 834 F.2d at 1246; Capps, 784 F.2d at 618.  This factor, therefore, weighs in favor of
borrowed employee status.
 
9.    
Who had the obligation to pay the
employee?
The focus under this factor is not
on which entity physically paid the employee; rather, we consider which entity
furnished the funds from which the employee was paid.  See
Melancon, 834 F.2d at 1246 (“Amoco furnished the funds from which Beraud
paid Melancon, and this is the determinative inquiry for this factor.”).  This factor supports borrowed employee status
when the original employer pays the employee “based on time tickets that had to
be verified daily by [the borrowing employer].” 
Brown, 984 F.2d at 679; Billizon, 993 F.2d at 105 (“D&C paid
Billizon, but his pay was based on time tickets verified by Conoco.”); Capps, 784 F.2d at 618 (“While Davis had
the obligation to pay Capps, Davis received the funds to pay Capps from
Baroid.  Since Baroid paid Davis at an
hourly rate for Capps’ work, and then Davis paid Capps at a lower hourly rate,
Baroid in essence paid Capps.”).
It is undisputed that Labor Ready physically
furnished Lomeli each of his paychecks and that he never received a paycheck
directly from Southwest.  Lomeli also
testified, however, that his supervisors at Southwest had to sign the work
tickets that he returned to Labor Ready. 
These tickets reflected the number of hours that he worked each day.  Lomeli agreed that if a Southwest employee
did not verify his work ticket, he would not get paid for his work on that
day.  Wayne Herman averred that Southwest
paid Labor Ready the “funds that are used to pay those individuals that are
assigned to [Southwest]” and that the paychecks issued by Labor Ready are “the
extent of Labor Ready’s involvement with the workers while they are at
Southwest’s facility.”
We conclude that although Labor
Ready physically paid Lomeli, his pay was based on work tickets that had to be
verified daily by Southwest employees. 
Southwest paid Lomeli’s wages via Labor Ready based on the number of
hours that Lomeli worked each day at Southwest. 
Because Southwest furnished the funds from which Labor Ready paid
Lomeli, we conclude that this factor weighs in favor of borrowed employee
status.  See Brown, 984 F.2d at 679; Melancon,
834 F.2d at 1246; Capps, 784 F.2d at
618.
10.           
  Balance of borrowed employee factors
Even if we assume that the third
factor—whether there was an
agreement, understanding, or meeting of the minds between the original and the
borrowing employer—weighs
against a borrowed employee finding and that the seventh factor—whether the new employment was over a
considerable period of time—is neutral
in the analysis, the remaining factors weigh in favor of borrowed employee
status.  We conclude that the summary
judgment record establishes that Lomeli was Southwest’s borrowed employee.  See
Billizon, 993 F.2d at 106 (finding borrowed employee status satisfied even
though third factor weighed against finding and seventh factor was neutral); see also Brown, 984 F.2d at 678 n.5 (“We
recognize and reiterate that the terms of a contract and the related factual
issues do not automatically prevent summary judgment or direct verdict.  If the remaining borrowed employee factors
overwhelmingly point to borrowed employee status, a summary judgment or direct
verdict is appropriate.”).  We therefore
hold that the trial court correctly rendered summary judgment in favor of
Southwest.
We overrule Lomeli’s sole issue.
Conclusion
          We
affirm the judgment of the trial court.
 
 
                                                                   Evelyn
V. Keyes
                                                                   Justice

 
Panel
consists of Justices Keyes, Higley, and Yates.[5]
 




[1]
          Davila later testified that if a
Labor Ready employee performed poorly, this would not be brought to her
attention as Human Resources Manager, but the Southwest supervisors had the
right to tell a Labor Ready employee not to return to the shipyard if they were
unsatisfied with the employee’s performance.


[2]
          In Brown v. Union Oil Co. of California, the Fifth Circuit noted,
while analyzing whether Brown raised a fact issue on the first Ruiz factor, that “[the original employer’s]
superintendent testified that if Brown was asked to do something against Gulf
Inland’s policies, Brown was instructed to call Gulf Inland to deal with the
conflict.”  984 F.2d 674, 677 (5th Cir.
1993).  Lomeli presented no such evidence
in this case, nor did he present evidence, contrary to his assertion on appeal,
that Labor Ready “required” its employees to follow its instructions in the
event of a conflict with Southwest’s instructions.


[3]
          Lomeli notes that it is
undisputed that Southwest did not provide his “transportation, lodging, [or]
food.”  All of the cases in which the
Fifth Circuit has considered whether the borrowing employer provided these
particular items involved the employee working on an offshore platform.  See,
e.g., Billizon v. Conoco, Inc.,
993 F.2d 104, 105 (5th Cir. 1993). 
Southwest is located in Channelview on the San Jacinto River off of
Interstate 10, and Lomeli testified in his deposition that he lives in Houston.  Under these circumstances, the fact that
Southwest did not provide transportation to its facility, lodging, or food to
Lomeli is irrelevant.


[4]
          As support for his contention
that Southwest could not fire Labor Ready employees, Lomeli cites to the
following deposition testimony from Maria Davila:
 
Q:        But when a Labor Ready employee has
performance issues, you can’t terminate his employment, fair?
 
A:        I’m not involved with Labor
Ready people.
 
Davila is
the Human Resources Manager for Southwest. 
Her later deposition testimony reflects that although she would not deal with a poor
performance issue, a Southwest supervisor could tell a Labor Ready employee not
to return to the yard.


[5]
          The Honorable Leslie Yates,
retired Justice, Fourteenth Court of Appeals, sitting by assignment.  See
Tex. Gov’t Code Ann.
§ 74.003(b) (Vernon 2005).


