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California: Dual Employment in the Context of PEO Lease-Back Situations

April 27, 2023 (3 min read)

Here’s an interesting noteworthy panel decision that addresses the issue of dual employment in the context of PEO lease-back situations. Our headnote is set forth below.


Copyright 2023 by Matthew Bender & Company, Inc.

Jesus Ortega Gonzalez, Applicant v. Major Transportation Services, Inc., a California Corporation, Baljinder S. Gill, individually, and dba Major Express Logistics, Peoplease LLC, National Interstate Richfield, Defendants

W.C.A.B. No. ADJ11968759—WCJ Bryce Y. Hatakeyama (FRE); WCAB Panel: Commissioners Capurro, Dodd, Snellings

Workers’ Compensation Appeals Board (Board Panel Decision)

Opinion Filed April 13, 2023

Publication Status:  CAUTION:  This decision has not been designated as a “significant panel decision” by the Workers’ Compensation Appeals Board. Practitioners should proceed with caution when citing to this panel decision and should also verify the subsequent history of the decision, as these decisions are subject to appeal. WCAB panel decisions are citeable authority, particularly on issues of contemporaneous administrative construction of statutory language [see Griffith v. WCAB (1989) 209 Cal. App. 3d 1260, 1264, fn. 2, 54 Cal. Comp. Cases 145]. However, WCAB panel decisions are not binding precedent, as are en banc decisions, on all other Appeals Board panels and workers’ compensation judges [see Gee v. Workers’ Comp. Appeals Bd. (2002) 96 Cal. App. 4th 1418, 1425 fn. 6, 67 Cal. Comp. Cases 236]. While WCAB panel decisions are not binding, the WCAB will consider these decisions to the extent that it finds their reasoning persuasive [see Guitron v. Santa Fe Extruders (2011) 76 Cal. Comp. Cases 228, fn. 7 (Appeals Board En Banc Opinion)]. LexisNexis editorial consultants have deemed this panel decision noteworthy because it does one or more of the following: (1) Establishes a new rule of law, applies an existing rule to a set of facts significantly different from those stated in other decisions, or modifies, or criticizes with reasons given, an existing rule; (2) Resolves or creates an apparent conflict in the law; (3) Involves a legal issue of continuing public interest; (4) Makes a significant contribution to legal literature by reviewing either the development of workers’ compensation law or the legislative, regulatory, or judicial history of a constitution, statute, regulation, or other written law; and/or (5) Makes a contribution to the body of law available to attorneys, claims personnel, judges, the Board, and others seeking to understand the workers’ compensation law of California.

Disposition: The Petition for Reconsideration is denied.

Employment Relationships—Dual Employment—WCAB, denying reconsideration, affirmed WCJ’s finding that applicant, while working as truck driver on 9/2/2018, was employed by trucking company Major Transportation Services (Major Transportation) and by Professional Employer Organization (PEO) Peoplease LLC (Peoplease), and that Peoplease was required to provide workers’ compensation for Major Transportation’s joint employees, when WCAB reasoned that dual employment exists where employee is sent by one employer (general employer) to work for another employer (special employer), and both employers have direction and control over details of employee’s work and benefit from work, that in lease-back situations involving PEOs, such as existed in this case, special employer generally receives workers’ compensation coverage for joint employees from PEO through “client policy” that covers claims for their joint employees under single policy pursuant to Labor Code § 3602(d), that it was undisputed applicant was employed by Peoplease (general employer) and Major Transportation (special employer) both before and after his date of injury, and that in context of applicant’s dual employment relationship, fact that Peoplease did not issue applicant’s paycheck covering his date of injury did not make applicant sole employee of Major Transportation on that date for purposes of workers’ compensation coverage, because Peoplease employed applicant in order to provide workers’ compensation insurance for Major Transportation’s employees and agreed to obtain insurance pursuant to Labor Code § 3602(d), Peoplease policy was only available insurance, and there was no factual support for finding of temporary suspension of employment relationship between applicant and Peoplease simply because Major Transportation issued paycheck for date of injury due to late payment by Peoplease for pay period covering date of injury. [See generally Hanna, Cal. Law of Emp. Inj. and Workers’ Comp. 2d § 3.142; Rassp & Herlick, California Workers’ Compensation Law, Ch. 2, § 2.07, Ch. 3, § 3.30.]