## Facts

- ATS operated an employee-leasing/payroll service that placed a customer’s workers on ATS’s payroll and leased them back for day-to-day work.
- Mercer Trucking contracted with ATS for payroll, taxes, benefits, and workers’ compensation coverage for Mercer’s personnel.
- The agreement assigned Mercer responsibility for “directing, supervising, and controlling the manner and details” of leased employees’ work.
- Mercer hired and fired its drivers in practice, dispatched loads, set routes and schedules, and supervised driving; ATS handled payroll and related administrative functions.
- Roger Walker drove trucks for Mercer and was to be on ATS’s payroll under the leasing arrangement.
- In Tennessee, Walker collided with a minivan, killing its occupants, while performing a delivery under Mercer’s instructions and using Mercer’s truck.
- The decedents’ representatives sued Walker, Mercer, and ATS in Alabama, seeking to impose vicarious liability on ATS under respondeat superior.
- ATS argued it lacked the right to control Walker’s driving and that Walker was Mercer’s loaned servant at the time of the accident.

## Issues

1. Under Tennessee law governing the master–servant question, whether Walker was Mercer’s loaned servant at the time of the collision, defeating vicarious liability against ATS.
2. Whether ATS was entitled to judgment as a matter of law on respondeat superior claims despite payroll status and formal employment documents.

## Decision

- The Supreme Court of Alabama reversed the judgment against ATS and remanded.
- Applying Tennessee law, the court held that Walker was Mercer’s loaned servant at the time of the accident.
- The court concluded ATS did not have the right to control the manner and means of Walker’s driving on the trip in question.
- Because Mercer had the controlling right and exercised day-to-day supervision, ATS was entitled to judgment as a matter of law on vicarious-liability claims.

## Legal Principles

- In a loaned-servant/borrowed-servant setting, the decisive inquiry is which entity had the right to control the employee’s conduct in performing the specific act that caused the injury.
- Payroll status, administrative functions, and formal labels of “employer” are subordinate to evidence of actual (or retained) control over the manner and method of work.
- Where the special employer directs and controls the employee’s physical performance of the work, the special employer is the master for respondeat superior purposes.

## Conclusion

The court held that an employee-leasing company that provides payroll and benefits services is not vicariously liable for a leased worker’s negligence when the customer retains and exercises the right to control the details of the worker’s performance at the time of the tort, making the worker the customer’s loaned servant as a matter of law.


ATS, Inc. v. Beddingfield, 878 So. 2d 1131 (Ala. 2003)