Lokke v. ADESA Minneapolis

Background

Deborah Lokke was an employee of Express Managed Services, LLC, a temporary staffing agency. In 2016, Express entered into a Temporary Labor Agreement with ADESA Minneapolis, an operator of car-auction facilities, under which Express would provide temporary workers to ADESA. Express placed Lokke with ADESA as a temporary employee.

On February 27, 2018, ADESA assigned Lokke to clear snow and ice from vehicles before an auction. She slipped on ice while walking in ADESA’s vehicle parking lot and injured her head, neck, tailbone, and back. The parties agreed that ADESA controlled, directed, and supervised the work Lokke performed, and that the work was related to ADESA’s business.

Express and ADESA both maintained workers’ compensation insurance. Lokke filed a workers’ compensation claim against Express, which settled in March 2021. She then sued ADESA in Minnesota state court, alleging negligence in the maintenance and supervision of the parking lot. ADESA removed the case to federal court and moved for summary judgment.

Jurisdiction

The court found that it had subject-matter jurisdiction based on diversity of citizenship. Lokke’s complaint sought more than $50,000, and ADESA asserted that the amount in controversy exceeded $75,000. Lokke did not challenge that assertion.

Parties’ Arguments

ADESA argued that Minnesota’s Workers’ Compensation Act made workers’ compensation Lokke’s exclusive remedy because ADESA was her “special employer” under the loaned-servant doctrine. That doctrine can make a worker the employee of both a general employer and a special employer.

Lokke argued that her lawsuit was a third-party premises-liability action rather than an employment-related claim. She also argued that the loaned-servant doctrine required proof that she consented to work for ADESA as a special employer.

Court’s Analysis

Under Minnesota law, the loaned-servant doctrine requires three conditions: the employee expressly or impliedly agreed to work for the special employer; the work was essentially the special employer’s work; and the special employer had the right to control the work’s details.

The parties disputed only the first condition. The court relied on Minnesota Supreme Court precedent holding that, when a labor broker or temporary employment agency supplies a worker to a customer, the worker’s consent to an employment contract with the customer is implied as a matter of law. Express was the labor broker and general employer, and ADESA was the customer and special employer. The court therefore held that Lokke’s consent to work for ADESA was implied.

Because ADESA controlled Lokke’s work and the work was part of ADESA’s business, the court concluded that the loaned-servant doctrine applied. Since Lokke had already pursued and settled her workers’ compensation claim against Express, the Minnesota Workers’ Compensation Act’s exclusive-remedy provision barred her damages action against ADESA.

Disposition

Judge John R. Tunheim granted ADESA’s motion for summary judgment and directed that judgment be entered accordingly.