I have always found the CGL policy’s definition of “employee” to be curious: “Employee” includes a “leased worker.”  Employee does not include a “temporary worker”.
 
That’s it.  The definition doesn’t say who an employee is, only who it incudes and who it’s not.  In the end, the analysis usually comes down to whether the injured person is an “employee” under state law, which may involve looking at the law of employee versus independent contractor or some other area.  So, after all that, the part about “leased worker” and “temporary worker” – the entire language of the exclusion – usually never even comes into play.

But in Union Insurance Company v. New England Ice Cream Corp., No. 21-10740 (D. Mass. Nov. 4, 2022), the case was all about whether someone was an employee based on being a “temporary worker.”
 
New England Ice Cream Corp. is, well, a company that distributes ice cream.  [Who’s buried in Grant’s tomb?]  Its sales spike during the summer months.  [The shocks just keep coming.]  To meet the need for extra employees for Peak Season (April to September), the company works with various staffing agencies.

Angel Rivera went to work for New England Ice Cream.  He had been furnished to NEICC through a staffing services company.  He alleged that “on or about April 28, 2019, while he was working in the course and scope of employment for Monroe [the staffing company] as a laborer at NEICC’s warehouse, NEICC negligently breached its duties ‘by expos[ing] [him] to freezing temperatures in the refrigerated warehouse with inadequate protective clothing . . . for prolonged periods of time.’”

Rivera filed suit against NEICC for personal injuries.  Union Insurance disputed that it had a duty to denied NEICC under a general liability policy, but agreed to do so subject to a reservation of rights, and then filed a coverage action.

At issue, as you would expect, was the applicability of the Employers Liability Exclusion.  The Employers Liability Exclusion would not apply, and, hence, NEICC would be entitled to coverage, if Rivera had not been an “employee” at the time of the injury, because he had been a “temporary worker.”  But if Rivera had been a “leased worker,” he would have been an “employee” and NEICC would not be entitled to coverage.

The policy defined “leased worker” as “a person leased to [the insured] by a labor leasing firm under an agreement between [the insured] and the labor leasing firm, to perform duties related to the conduct of your business.”  A “temporary worker” was defined as “a person who is furnished to [the insured] to substitute for a permanent ‘employee’ on leave or to meet seasonal or short-term workload conditions.”  Union argued that Rivera was a “leased worker” and NEICC argued that Rivera was a “temporary worker.”

On its face, it seems very clear that Rivera was a “temporary worker.”  After all, he was hired to meet NEICC’s needs for additional warehouse workers during the peak -- warm weather -- season.  So where’s the issue?

During the claim investigation, a Union Insurance representative ask an NEICC official about Mr. Rivera’s hiring and the official responded as follows: “NEICC hired Mr. Rivera with the intention of a temp to permanent role. NEICC has been successful hiring temp to perm for our warehouse positions. The extreme cold warehouse environment is not for everybody, this allows NEICC to not invest upfront with employees that might leave the job after several weeks, days or hours. If the employee can do the job then after 90 days we move towards hire for full time employment with NEICC.”

So, as Union saw it, Mr. Rivera was not a “temporary employee,” as NEICC was hoping that he could handle the cold nature of the job and become a permanent employee.

However, the court disagreed, looking at the issue based on the purpose of the employee’s hiring:

“Looking prospectively at NEICC’s intent in hiring Rivera, as the Court must under the relevant case law cited above, its intent was to address its seasonal needs. This is reflected in the timing of the hire, its workload needs at the time of hiring and its arrangement with Monroe to make this hire. That a temporary worker might become a permanent one, does not change the nature of that temporary engagement. Even Lagor’s [of NEICC] response to Hurley [of Union] upon which Union relies, makes clear that the initial hire was as a temporary worker and any move to a permanent position might only come later if he could do the job and, even after 90 days, it would be a move toward hire, not a guaranteed hire which is supported by other uncontested evidence that most temporary workers hired in this manner are let go at the end of the Peak Season.”

It's an interesting case and one in which that curious definition of “employee” served its purpose.