2021 Colorado Code
Title 8 - Labor and Industry
Article 41 - Coverage and Liability
Part 3 - Liability
§ 8-41-303. Loaning Employer Liable for Compensation

Where an employer, who has accepted the provisions of articles 40 to 47 of this title and has complied therewith, loans the service of any of the employer's employees who have accepted the provisions of said articles to any third person, the employer shall be liable for any compensation thereafter for any injuries or death of said employee as provided in said articles, unless it appears from the evidence in said case that said loaning constitutes a new contract of hire, express or implied, between the employee whose services were loaned and the person to whom the employee was loaned.

History. Source: L. 90: Entire article R&RE, p. 480, § 1, effective July 1.

This section is similar to former § 8-52-101 as it existed prior to 1990.

The common law rule that a worker can simultaneously be the employee of two persons applies to cases arising under the workers' compensation act. The rule allows an employee to be simultaneously in the general employment of one employer and in the special employment of another, provided the employee understands that he or she is submitting to the control of the special employer. In the dual employment situation, the employee's only remedy for an injury sustained while in the course of employment with the borrowing employer is through worker's compensation. A separate tort action against the special employer is barred. Evans v. Webster, 832 P.2d 951 (Colo. App. 1991).

Unless there is new contract of hire, loaned employee does not become covered employee. Where an employee is loaned to another by his covered employer, he does not become a covered employee of the other, nor does the other become a covered employer unless a new contract of hire is made between the employee and the borrowing employer. Continental Sales Corp. v. Stookesberry, 170 Colo. 16 , 459 P.2d 566 (1969); Continental Sales Corp. v. Indus. Comm'n, 31 Colo. App. 223, 501 P.2d 90 (1972).

Thus, when an employer loans an employee he remains liable for injuries to or death of that loaned employee “... unless it shall appear from the evidence in said case that said loaning constitutes a new contract of hire, express or implied, between the employee whose services were loaned and the person to whom he was loaned”. Rocky Mt. Dairy Prods. v. Pease, 161 Colo. 216 , 422 P.2d 630 (1966).

“Loaned employee” may maintain negligence action. A “loaned employee” and an “employee” under workmen's compensation are not the same, and no provision prohibits or limits a “loaned employee” from maintaining a negligence action against the borrowing employer. Continental Sales Corp. v. Stookesberry, 170 Colo. 16 , 459 P.2d 566 (1969).

For no provision of the workmen's compensation act either specifically or impliedly grants immunity from common-law liability for injury to one who borrows the services of an employee from an employer who has a policy of workmen's compensation insurance. The loaning employer is the only employer whose compliance with the workmen's compensation act makes him immune from a common-law action for injury to the loaned employee. Continental Sales Corp. v. Stookesberry, 170 Colo. 16 , 459 P.2d 566 (1969).

But employee loaned for special purpose is employee of borrowing company. Where an employee of one company is loaned to another for a special purpose and while engaged in such purpose in injured, he is an employee of the borrowing company with the attendant rights and duties incident thereto. Jacobson v. Doan, 136 Colo. 496 , 319 P.2d 975 (1957).

And the special employee loses the right to sue the special employer at common law for negligence. But the courts have usually been vigilant in insisting upon a showing of a deliberate and informed consent by the employee before employment relation will be held a bar to common law suit. Continental Sales Corp. v. Stookesberry, 170 Colo. 16 , 459 P.2d 566 (1969).

There are nine criteria relevant to determining whether a special employment relationship exists. They are: (1) Whether the borrowing employer has the right to control the employee's conduct; (2) whether the employee is performing the borrowing employer's work; (3) whether there was an agreement between the original and borrowing employer; (4) whether the employee has acquiesced in the arrangement; (5) whether the borrowing employer had the right to terminate the employee; (6) whether the borrowing employer furnished the tools and place for performance; (7) whether the new employment was to be for a considerable length of time; (8) whether the borrowing employer had the obligation to pay the employee; and (9) whether the original employer terminated its relationship with the employee. Evans v. Webster, 832 P.2d 951 (Colo. App. 1991).

Of the nine criteria, three are decisive: Whether the employee has acquiesced in the arrangement; whether the borrowing employer has the right to control the employee's conduct; and, whether the borrowing employer had the right to terminate the employee. Evans v. Webster, 932 P.2d 951 (Colo. App. 1991).

A tort suit against a special employer is barred by the workers' compensation act when an employee consents to work for the special employer pursuant to a contract of hire within the workers' compensation act and the employee is an employee of both the general and special employer. Evans v. Webster, 832 P.2d 951 (Colo. App. 1991).

Truck driver special employee of carrier. Truck driver, whose general employer lent him to a carrier pursuant to a lease, became a special employee of the carrier for the purposes of liability for workmen's compensation. Archer Freight Lines v. Horn Transp., Inc., 32 Colo. App. 412, 514 P.2d 330 (1973).

Applied in Horn Transp., Inc. v. Claimants in re Death of Wards, 40 Colo. App. 395, 576 P.2d 195 (1978).