Schwager v. VHS Acquisition Corp/Vanguard Health Management – 7/3/2006

July 7, 2006

Arizona Court of Appeals Division One Holds That the Workers’ Compensation Act’s “Lent Employee Doctrine” Applies to an Employee Who Was Injured While Attempting to Leave Her Place of Employment After Completing Her Shift.

Cynthia Schwager worked for InteliStaf which provided medical personnel to hospitals on a contract basis. Schwager suffered an injury at a hospital that contracted with InteliStaf while she was leaving work after completing her shift. In addition to filing a claim with and receiving benefits from InteliStaf’s workers’ compensation carrier, Schwager sued the hospital and the hospital employee who allegedly caused her injury. The Court explained that the “lent employee doctrine” applies when a general employer, such as InteliStaf, lends an employee to a special employer like the hospital. Pursuant to the doctrine, if the special employer is obligated to provide workers’ compensation coverage to the lent employee – as the hospital was here – the doctrine extends immunity to the special employer from suit brought by the lent employee (whether or not the employee seeks to recover benefits from the special employer). Moreover, the “lent employee doctrine” applies even though Schwager was “off duty” when the accident occurred because Arizona cases have consistently defined employment for purposes of workers’ compensation coverage as including that period in which an employee is leaving the employer’s premises after having clocked out. Accordingly, Schwager could not sue the hospital.

The Court also held that A.R.S. § 23-1022(A) prevents employees who are provided with coverage under the Act from suing their co-employees for accidents arising from their employment. The Court distinguished its decision in Inmon v. Crane Rental Services, 205 Ariz. 130, 67 P.3d 726 (App. 2003), which had held that the “lent employee doctrine” did not apply to the facts in that case.

Justice Snow authored the decision. Judges Lankford and Timmer concurred.