Arizona Court of Appeals: Private Contractor’s Lawsuit Against the State Barred by Workers’ Compensation

In Wagner v. State, 1 CA-CV 16-0134, 2017 WL 1406440 (App. Apr. 20, 2017), a social worker working at a prison operated by the Arizona Department of Corrections (“ADC”) slipped and fell on a wet floor. At the time, the social worker was working as an employee of a private contractor hired by ADC to provide healthcare services to ADC inmates. The social worker filed a workers’ compensation claim against her employer and received benefits. She then sued the State for negligence. The Court of Appeals held that the social worker was a “statutory employee” of the State, see A.R.S. § 23-902(B), and therefore barred from pursuing a tort action by the workers’ compensation system’s exclusive-remedy provision. See A.R.S. § 23-1022(A). Although the contract between the State and the private contractor explicitly stated that the contractor’s employees are not State employees, the social worker was nonetheless a “statutory employee” because the State retained the right to control or supervise the contractor’s work—including the power to approve employee hires and the right to access all staff, work product, records, reports, and correspondence as part of its monitoring duties—and the services constituted a part or process in the usual and regular course of the State’s business—ADC has a non-delegable statutory and constitutional duty to provide inmate health care.