Summary
This Tennessee Workers' Compensation Appeals Board decision addresses an interlocutory appeal regarding whether an employer is subject to the state's workers' compensation laws based on employing five or more people. The board reversed the trial court's finding that separate but related LLCs could be considered collectively to meet the employee threshold, concluding instead that the record did not support a finding that the defendant employed the requisite number of persons for pay. Consequently, the board remanded the case for further proceedings.
Topics
Practice areas
Questions Presented
- Whether a Tennessee employer with fewer than five employees can be deemed to employ five or more persons by aggregating employees of separate but related LLCs for purposes of the Workers' Compensation Law.
Holdings
- The Board reverses the trial court's order and holds that the preponderance of the evidence does not show Defendant employed five or more persons; therefore Defendant is not subject to the Workers' Compensation Law.
Key quotations
“The court then described Defendant’s practice in this case as having “the obvious and troubling effect . . . of these three stores all benefit[ting] from the labor of more than five employees while still avoiding the requirement of providing workers’ compensation benefits.”” (N/A)
“We conclude the preponderance of the evidence supports that finding and therefore reverse the trial court’s order regarding the applicability of Tennessee’s Workers’ Compensation Law.” (N/A)
Factual background
Crystal Green tripped over a cord at a 101 Vape & Smoke, LLC store on April 2, 2024, injuring her right ankle. She was the only employee on duty at the time and sought workers' compensation benefits. Defendant asserted it employed fewer than five persons and therefore was not subject to the Workers' Compensation Law. Evidence showed Defendant owned multiple LLCs operating vape shops and occasionally loaned employees among them.
Procedural history
Employee filed a petition for benefits after a workplace injury. The trial court held that, considering related entities, Defendant employed five or more persons and ordered provision of a physician panel while denying temporary disability benefits. Both parties appealed.
Remand instructions
Remand for further determination of whether Defendant employed five or more persons for pay and for any appropriate workers’ compensation benefits.