American Staffing Association (03/09/12) Ed Lenz

Staffing firm clients increasingly demand to be indemnified against a broad range of potential liabilities, and there is intense competitive pressure for staffing firms to agree to these demands. But doing so could result in a nasty surprise and significant liability.

A 2002 appellate court decision involving a temporary employee on a construction assignment, who caused an explosion while moving propane tanks, illustrates this danger. In defending against the lawsuit brought by the client, the staffing firm argued it was not liable because the temporary employee was under the client’s control at the time of the accident. The district court agreed, but the appeals court reversed the decision.

Staffing firms should not be expected to cover risks beyond those inherent in the staffing business. Staffing firms should not assume risks related to the client’s business, including liability for the client’s products and services. To help ASA members and their attorneys deal with these and other issues, ASA has developed suggested contract language that spells out the staffing firm’s and the client’s responsibilities.