Hawkeye Molding makes products by melting material into molds. Hawkeye typically gets its packaging workers through Jacobson Staffing Company. Hawkeye does not do the hiring directly, but rather they refer all interested workers for these positions to Jacobson. However, Hawkeye does the training and supervision of these workers during shifts. Jacobson provides insurance and workers' compensation coverage. Jacobson collects money for the hours the employee worked plus a 45% markup for benefits and administrative costs.
Sager was an employee of Jacobson and worked in packaging for Hawkeye. He used molding machine during his shifts. In 2012, Sager was injured at work when hot plastic came out of a machine and landed on the back of his hand. Sager sought Workers' Compensation from Jacobson and received a settlement for his injury. Hawkeye did not file a report to its insurance carrier or to Iowa OSHA.
In 2014, Sager's attorney sent a letter to Hawkeye stating that under Iowa law Sager could bring a third party claim against a manufacturer or a co-employee for gross negligence. Hawkeye responded that Sager was not an employee of Hawkeye at the time of injury, but was employed by Jacobson. Sager filed suit against Hawkeye stating that Hawkeye was negligent in several ways and this caused Sager's injury. The court rules in favor of Hawkeye. Sager appeals.
In the appeal, the court considered a five-factor test in determining whether there is a contractual relationship: 1) the right of selection, or to employ at will; 2) responsibility for payment of wages by the employer; 3) the right to discharge or terminate the relationship; 4) the right to control the work; and 5) the identity of the employer as the authority in charge of the work or for whose benefit it is performed. The court found that there was not enough to support a conclusion as to whether Sager was, or was not, an employee of Hawkeye as a matter of law. Therefore, the court reversed the district court's summary judgment ruling and sent the matter back to the district court for further proceedings.