DEFINITION of ‘Borrowed Servant Rule’
A legal doctrine indicating that an employer may be held liable for the actions of a temporary employee. The borrow servant rule creates a liability for the employer even though the temporary, or borrowed, employee is not a permanent employee. It is sometimes called the borrowed servant doctrine.
BREAKING DOWN ‘Borrowed Servant Rule’
The borrowed servant rule shifts liability from the worker’s regular employer to the employer that is temporarily borrowing the worker. The temporary employer, called the special employer, is responsible for directing the work of the borrowed worker, and the borrowed worker provides services for the special employer rather than his or her regular employer. The temporary employer is thus in charge of the employee’s actions.
For example, the manager of a florist shop realizes that the company won’t be able to deliver all of its orders in time because it cannot load the truck with the number of personnel that it has. The manager asks the candy store manager next door if he could spare a couple of employees for a day. While loading the delivery truck, one of the borrowed employees slips and is injured. Even though the injured worker is not a permanent employee, the florist can be liable for the injury because there was an implied – albeit temporary – contract between the florist and the borrowed employee. The candy store where the employee normally works is not held liable.
A related doctrine is called the captain of the ship doctrine. This doctrine states that the manager in a special employer-borrowed employee relationship is responsible for the actions of the borrowed employee, even if the manager is not directly monitoring the employee. For example, the manager may be in another room or offsite when the borrowed employee becomes injured.
The borrowed servant rule is most frequently seen in workers compensation insurance claims.