Wednesday, July 31, 2013

Massachusetts Appeals Court holds that short-term can be of indefinite duration

My last post discussed Central Mut. Ins. Co. v. True Plastics, Inc., 84 Mass. App. Ct. 17 (2013), in which the Massachusetts Appeals Court addressed whether Sanchez, an employee of a staffing agency, was a temporary employee or a leased worker of the company to which she was assigned, True Plastics, Inc.  If she was a leased worker then, as discussed in my last post, the liability policy issued to True Plastics by Central Mutual would not provide coverage.  If she was a temporary worker, however, the policy would provide coverage.  

The policy defined "temporary worker" as a person furnished to meet "short-term workload conditions."  The policy did not define short-term workload conditions. 

In a decision that invites insurance fraud, the court held that the only consideration in determining whether a person was furnished to meet short-term workload conditions is what the employer intended at the time the worker was hired.  "Even if a worker's assignment ends up being lengthy, he or she will still be a 'temporary worker' within the meaning of the policy, provided the insured held an objectively reasonable expectation at the time that the worker was furnished [that the worker was hired] to meet a short-term workload condition. 

Central Mutual argued that "short-term" workload conditions cannot be indefinite.  The court disagreed, and held that a short-term workload condition need not be of finite duration. 

The court held that True Plastics had met its burden of proving that Sanchez was furnished to meet a short-term increase in its workload. 

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