What Do You Think (tines two)?
When an employee is sent to work across state lines and is injured there, the determination of which state’s law applies can dramatically impact the employer’s liability. Employers need to know the types of factors that can force them to defend themselves under another state’s law, which may or may not open them up to greater legal risk.
In a recent case that reached Maine’s highest court, a staffing agency hired a Massachusetts resident to work in Maine. The agency was incorporated in Florida and authorized to do business in Massachusetts. It assigned the employee to work for Envirovantage, a New Hampshire corporation. The jobsite, however, was in Maine. While he worked there, he resided in a nearby hotel.
Part 1: Which state’s workers’ compensation law applied?
After the employee was injured at work, he filed for workers’ compensation against the staffing agency and received benefits. He then sued Envirovantage for negligence.
Envirovantage argued that Maine’s law applied, and that under Maine’s exclusive remedy provision, it was immune to the lawsuit. The employee, on the other hand, contended that Massachusetts law applied.
Because the injury occurred in Maine, the court looked at how Maine decides which law to apply when multiple states are potentially involved. Maine follows the “most significant contacts and relationships” approach. Under this approach, the law of the state where the injury occurred determines the party’s rights, unless some other state has a more significant relationship to the occurrence and the parties.
Did Massachusetts worker’s compensation law apply to the plaintiff’s negligence claim?
A. No. The injury occurred in Maine and the employee resided in Maine while he was working there.
B. Yes. Massachusetts was where the employee legally resided, where his employer was authorized to do business, and where he filed for worker’s compensation.
If you selected B, you agreed with the Supreme Judicial Court of Maine in Valmont-Oliver v. Envirovantage, Inc., No. Cum-25-313 (Maine 05/19/26), which applied Massachusetts law.
Both states had an interest in the case, but Massachusetts had the most significant contacts. For example, the worker was a Massachusetts resident. He was also employed by a firm authorized to do business in Massachusetts.
Maine’s ties to the case were weaker. It was where the injury occurred. However, no Maine resident was a party to the case. Envirovantage was not incorporated there. Further, the worker filed for and received workers’ compensation benefits in Massachusetts. Thus, the court found that Massachusetts had the primary interest in the case and that its law must determine the outcome.
Part 2: Was Envirovantage immune to the lawsuit?
The Staffing Agreement between the agency and Envirovantage provided that the agency would recruit and pay employees. Envirovantage, on the other hand, would supervise them on the jobsite. The agreement stated that the agency would provide workers’ compensation benefits and handle workers’ compensation claims for employees. Envirovantage agreed to pay for the agency’s workers’ compensation insurance costs as part of the payment for its services.
Applying Massachusetts law, the court explained that in the case of a general employer (here, the staffing agency) and a special employer (here, Envirovantage), a special employer may be immune to personal injury lawsuits under a state’s worker’s compensation act’s exclusive remedy provision. This is the case if the general and special employer have agreed that the latter will be liable for carrying workers’ compensation insurance and paying workers’ compensation benefits.
Was Envirovantage immune to the lawsuit?
A. No. Its agreement didn’t make it liable for paying worker’s compensation benefits.
B. Yes. It agreed to pay the agency the cost of maintaining workers’ compensation coverage.
If you selected A, you agreed with the Court.
The fact that Envirovantage agreed to pay the agency the cost of workers’ compensation coverage as part of the payment for its services was not enough to show it was immune to the lawsuit. Under Massachusetts law, the court said, such an arrangement does not qualify as an agreement that Envirovantage would be liable for workers’ compensation benefits.
Such an agreement is not meant to shift responsibility for payment of workers’ compensation benefits to the special employer, but to assure the general employer a profit after paying all of the various costs of supplying the special employer with workers.
Get the full text of the case on Simply Research.
