Payroll Processing Does Not Constitute an Employment Relationship
Payroll Processing Does Not Constitute an Employment Relationship
Court Articulates Test for Vicarious Liability
Law of Agency Adopted
By: Corey Lloyd
Johnson v. GlobalSantaFe Offshore Services, Inc., No.14-30422, 2015 WL 4878556 (5th Cir. Aug. 13, 2015) Johnson v. Globalsantafe Offshore Servs., 2015 U.S. App. LEXIS 14244 (5th Cir. La. Aug. 13, 2015)On November 8, 2010 the drilling rig HIGH ISLAND VII was located near the Nigerian coast. Workers aboard the rig had lowered a set of stairs to provide room to move a ball valve so they could access the blowout prevention system for repair. A Nigerian boat approached the rig, and the ball valve blocked the stairs from retraction. Nigerian gunmen boarded the rig and shot superintendent James Johnson. He suffered severe leg injuries which required multiple surgeries including muscle transplants along with months of hospitalization and rehabilitation.Johnson brought negligence claims against multiple parties, including the particular claim against Global Santa Fe (GSF) discussed here. His claim against GSF under both general maritime law and the Jones Act asserted that GSF was vicariously responsible for the negligence of the rig hands aboard the HIGH ISLAND VII. The Eastern District of Louisiana granted GSF’s motion for summary judgment, which the Fifth Circuit affirmed.GSF first showed that the rig hands were not direct employees, and the issue at contest then became one of Agency. The Fifth Circuit summarized a variety of tests in agency cases – admiralty and otherwise – to determine whether GSF could be held liable for the actions of the rig workers. The test language included whether an employer had the right to control and direct the employees, had the right to discharge the employee, supplied them with tools and supervision, and had the employees on their payroll. The court determined that it is appropriate to rely on common law principles of agency to determine the employer’s identity in the maritime analysis of vicarious liability.GSF did not perform any functions related to safety, supervision, security, or any other day-to-day operations upon the HIGH ISLAND VII. Because GSF handled only payroll functions but no other typical employer duties, the Fifth Circuit affirmed the decision under general maritime law.Johnson also asserted GSF’s responsibility under the Jones Act, arguing that GSF had to prove that it had “divested itself of all control” over the employees. The Fifth Circuit pointed out that Jones Act case law regarding vicarious liability hinges on control. Johnson had cited Spinks v. Chevron Oil Company, in which the employer had to prove a lack of control, but the Fifth Circuit differentiated Johnson’s claim from that in Spinks. In Spinks, Spinks had unquestionably developed an employment relationship and the issue was whether he was still under their control. Here, the payroll operation alone again was not enough evidence that an employment relationship ever existed.Under general maritime law, the Jones Act, and for any other reasons, the Fifth Circuit affirmed the district court’s grant of summary judgment in favor of GSF because no reasonable jury could find an employment relationship between GSF and the HIGH ISLAND VII rig hands.
