Emery Humphries v. Fna Group, LLC; And Amtrust North America

Cite as 2025 Ark. App. 304
ARKANSAS COURT OF APPEALS
DIVISION II
No. CV-24-319

EMERY HUMPHRIES Opinion Delivered May 14, 2025

APPELLANT
APPEAL FROM THE ARKANSAS
WORKERS’ COMPENSATION
V. COMMISSION
[NO. G905793]
FNA GROUP, LLC; AND AMTRUST
NORTH AMERICA
APPELLEES REVERSED AND REMANDED

CINDY GRACE THYER, Judge

Emery Humphries appeals from an order of the Arkansas Workers’ Compensation

Commission (“the Commission”) that determined he was jointly employed by appellees FNA

Group, LLC (“FNA”); and Labor Solutions, LLC, and was thus foreclosed from pursuing a

tort claim against FNA following a work-related injury. We reverse and remand.

I. Factual and Procedural Background

In July 2019, Humphries was hired by a temporary staffing agency, Labor Solutions,

which assigned Humphries to work with one of its customers, FNA. 1 Relevant to the issues

raised in this appeal, the contract between Labor Solutions and FNA (identified in the

1
FNA is a manufacturer of pressure washers and outdoor power equipment with a
facility located in Decatur.
contract as the “Customer”) contains the following provision regarding the status of

personnel hired by Labor Solutions:

Labor Solutions, at its cost, shall provide personnel (the “Personnel”) to
perform the Services. Labor Solutions shall be solely responsible for the full payment
of all compensation due the Personnel, including, without limitation, all wages,
benefits, withholdings, payroll taxes and contributions. No Personnel of Labor Solutions
shall be deemed an employee of Customer for any purpose relating to this Agreement,
including, without limitation, under any compensation or benefit plan of Customer.

(Emphasis added.)

In August 2019, Humphries sustained a partial leg amputation in an accident

involving a box-baling machine. He filed suit against FNA and others in the Circuit Court

of Benton County.2 After FNA moved to dismiss the complaint, the circuit court stayed the

case as to Humphries’s claims against FNA so that the parties could litigate the issue of

Humphries’s employment status in a proceeding before the Commission.

In May 2023, an administrative law judge (ALJ) held a hearing to determine whether

Humphries was a dual employee of both Labor Solutions and FNA at the time of

Humphries’s injury such that both would be protected under the exclusive-remedy provisions

of the Workers’ Compensation Act. Humphries testified that he was hired by Juan

Dominguez at Labor Solutions in July 2019. He said Dominguez went over the safety and

health rules with him and issued him a Labor Solutions shirt, which he wore to work every

2
Humphries’s circuit court suit also named the manufacturer of the baling machine
and the recycling company that leased the baler to FNA as well as multiple John Doe
defendants. Humphries also pursued a workers’-compensation claim against Labor
Solutions, which was settled and approved by the Commission.

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day. Labor Solutions provided him with personal protective equipment (PPE). Humphries

said that he worked on the line with other Labor Solutions employees, and the person who

directed him to work on the box baler on the day of his injury wore a Labor Solutions shirt.

Humphries testified that Labor Solutions controlled where he was working and provided all

instruction and training. FNA did not provide him with any instructions, training, or PPE.

Humphries’s W-4 listed Labor Solutions as his employer. A document titled “Labor

Solutions of Arkansas, LLC––Mini Facts” outlined a set of policies and procedures and was

signed by Humphries and Dominguez. The Mini Facts document established the pay rate,

rules of conduct, activities that could result in termination, attendance policies, and other

similar policies. Citing that document, Humphries testified that if he was sick or hurt, or

was going to miss work, he was supposed to call Labor Solutions. Humphries clocked in and

out of work using a Labor Solutions employment number. Humphries testified that Labor

Solutions set his pay, withheld taxes from his paycheck, set his hours, and performed his

orientation.

Humphries said he never signed any kind of contract or agreement with FNA, did

not have any kind of verbal agreement to work with FNA, and never had the desire or intent

to ever work for FNA. After Humphries’s injury, the CEO of Labor Solutions came to the

hospital to get information from him about the accident, but no one from FNA spoke to

him.

Regarding his injury, Humphries testified that a Hispanic man wearing a Labor

Solutions shirt had assigned him to work at the box baler a few days before the injury. Kevin,

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another employee wearing a Labor Solutions shirt, worked alongside Humphries on the

baler. No one from FNA told him how to load boxes into the baler; all of his training was

from Kevin. Kevin, who did not speak English, trained Humphries by showing him what to

do. No one gave Humphries an operator’s manual or written instructions on how to run the

baler, and no one taught him how to turn it on and off. Humphries said the baler would

clog from time to time, and Kevin “jumped inside of it and jumped on the boxes” to unclog

it. He then described his injury, saying that when the baler got stuck, he got into the machine

and started jumping, but nothing happened.

So at that point I proceeded to walk to the back wall and I kicked it in and as
soon as I kicked it in, my leg got stuck in between the wall and the cardboard pallet.
And at that point the machine kicked back on and I started screaming for help and
the cardboard pallet just got tangled with my ankle. There was nothing that I could
do. I started screaming for help and no one came. So I prayed to God to give me
strength to get out of it, so I ripped my leg out and I hopped out. And I had to hop
to find someone to help me.

Someone from Labor Solutions found him and helped him back to the Labor Solutions

office.

After Humphries rested his case, FNA’s first witness was Rick Hickson, the FNA

warehouse manager at the time of Humphries’s injury. Hickson said that FNA obtained its

workers through temporary agencies. He described the facility, noting that there was a sign

outside the entrance used by all employees that said “FNA Employee and Visitor Entrance.”

He said there were several signs around the workplace with the name FNA on them.

Hickson testified that Labor Solutions had an office on site with its own entrance at

the FNA facility. He said that when he needed workers in a given department, he would

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either go through FNA’s human-resources department or call Dominguez and request a given

number of people for the assembly line or warehouse; Labor Solutions would then recruit

people and bring them in. Hickson testified that FNA set the time to report to work every

day, set the times for breaks, set the pay rate, and determined who line leaders would be.

Labor Solutions had no input in determining who would work on a particular line or who

would be assigned to a given job. Hickson said that FNA retained the right to terminate

someone from Labor Solutions working in the plant; he said FNA would “just tell temp

agencies we did not need that person there anymore.” He asserted that FNA was “ultimately

responsible” for determining whether work was being done up to its standards and that FNA

controlled the means and method of work and how the job was done.

Regarding Humphries, Hickson said that Labor Solutions had nothing to do with

assigning him to work on the baler. As part of the OSHA investigation of the incident,

Hickson filled out a form that stated he had the authority to hire and fire Labor Solutions’

employees. The form also stated that an FNA supervisor directed the employees’ day-to-day

work for Labor Solutions. Hickson agreed that Labor Solutions would hire workers, do the

orientation, and provide workers’-compensation coverage, but as far as managing the work,

“that was done by FNA.” FNA maintained control over the quality of the work and the

manner in which it was done. He said FNA needed to maintain control over the work

because it involves “building a product for our customer and we have to have control over

who is doing what. It would be pretty chaotic if we would just bring people in and turn them

loose in the building.”

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On cross-examination, Hickson agreed that the Mini Facts document was a “Labor

Solutions document” and that FNA had nothing to do with creating it. Hickson said he had

nothing to do with human resources; he did not keep track of employment or personnel

files. He also conceded that the Mini Facts document gave Labor Solutions, not FNA, the

right to hire and fire personnel. Hickson acknowledged that Labor Solutions had its own

supervisors who would document attendance and check PPE and other safety measures.

Hickson said he had no personal knowledge of who asked Humphries to work on the

baler the day he was injured, who Humphries was working with that day, or who trained

him. Hickson was uncertain what job Humphries performed on the assembly line, and he

had no interaction with, training of, or control over Humphries. At the time of Humphries’s

injury, FNA had no personnel file on him and did not even have his phone number. It was

Hickson’s understanding that a Labor Solutions employee trained Humphries on the baler;

he agreed that no one from FNA trained Humphries to operate the baler.

Juan Dominguez worked for Labor Solutions at the time of the incident. He explained

that FNA would send Labor Solutions the number of openings it had for a given day or

week, and Labor Solutions would recruit people for the job. He did not recall interviewing

Humphries but said he would generally go over the necessary paperwork with employees. As

to the Mini Facts document, Dominguez said that FNA set the time for people to report to

work, set the pay rate, scheduled the breaks, and determined job assignments and overtime.

He said Humphries would have known that he was working for FNA. On cross-examination,

however, he acknowledged that the tax forms, paychecks, safety policies, and Mini Facts

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document all came from Labor Solutions, so he could “see where [an employee] might think

[he is] working for Labor Solutions.”

Tom Moffett, the FNA senior vice president, testified that part of his job involved

dealing with Labor Solutions. He explained that manufacturing power washers is a seasonal

job, so the company does not need the same number of people in its factories at all times.

Given the seasonal nature of FNA’s payroll needs, it was cheaper for the company to pay an

outside resource, like a temp agency, to handle payroll, taxes, and workers’ compensation.

FNA paid Labor Solutions a 25 percent markup over employee wages to cover administration

fees, recruiting fees, payroll taxes, and workers’ compensation. Wages, however, were set by

FNA. FNA, he said, “assumes control of the employee and designates the assignment and is

responsible for the daily oversight, training, management, and productivity of that individual

associate.” Labor Solutions would “do the orientation and get the people in the door,” and

FNA “move[d] the employees and control[led] the job.”

On cross-examination, Moffett agreed that FNA had not paid any benefits directly to

Humphries. He likewise agreed that he was unaware of any training that FNA ever provided

to Humphries and could not name any person at FNA who moved Humphries from one

position to another. He conceded that FNA had no records showing that FNA managed or

assessed the performance of any Labor Solutions individual employee. Moffett then shared

this exchange with Humphries’s counsel:

Q: I asked you some questions [in your deposition] and I don’t think you knew
the answer, but if [Humphries] were to say, hey, I am an employee of FNA and

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I want to make a sexual harassment claim against FNA, would you guys accept
him as your employee?

A: We would accept and investigate the allegations, but we would do it jointly
with Labor Solutions.

Q: You would reserve your right to allege he is not our employee, he is an
independent contractor, right?

A: We would not necessarily technically say that. We would just say, hey, look,
there is an allegation and our two HR departments for both companies would
interact. I don’t think we would ever think for a moment that we’re making a
declaration in terms of their employment status, but rather investigate the
claim.

Q: Other than the declaration you made in the contract of what the employment
status is?

A: That is fair, yes.

Q: Okay. And I could ask you about the whole slew of things: Alleged
discrimination, FMLA violations, EEOC, ADA, ERISA, all of those, you
would reserve your right to say he can’t make that claim against us because he is
not our employee, correct?

A: That is correct.

Q: Based on the contract you signed?

A: Yes, sir.

(Emphasis added.)

After considering posttrial briefs, the ALJ issued an opinion finding that Humphries

was not a “dual employee” of Labor Solutions and FNA. FNA timely appealed the ALJ’s

decision to the full Commission. In a 2–1 decision, the Commission reversed the ALJ,

reasoning that “our courts have consistently held that staffing agencies and temporary

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agencies such as Labor Solutions are part of today’s marketplace and staffing agency-

contractor relationships satisfy the dual-employee doctrine.” The Commission concluded

there was no express agreement between FNA and Humphries. It then considered whether

there was an implied agreement, which it said could be proved “by showing the parties

intended to contract by circumstances showing the general course of dealing between the

parties. The primary test is which party controls the work being done.” The Commission

concluded that “FNA had total control over all aspects of the work done in their facility,

including the quality of the work and how the work was performed. Labor Solutions had no

control or supervision over the line work or how FNA products were made.” Accordingly,

the Commission found that FNA was a dual employer of Humphries at the time of his injury.

The Commission discounted the language in the contract between FNA and Labor

Solutions, finding that because Labor Solutions “had no say in any essential aspect of

Humphries’s work with FNA, the parties were operating under an implied contract at the

time of the claimant’s injury.” Therefore, because FNA was a special employer of Humphries

at the time of his injury, FNA was entitled to the protection of the exclusive-remedy doctrine.

Humphries filed a timely notice of appeal and now argues to this court that the Commission

erred in finding that an implied contract existed between him and FNA.

II. Standard of Review

In workers’-compensation appeals, this court reviews the evidence and all inferences

in the light most favorable to the Commission’s findings and affirms if the decision is

supported by substantial evidence. Randolph v. Staffmark, 2015 Ark. App. 135, at 1, 456

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S.W.3d 389, 390–91. Substantial evidence exists only if reasonable minds could have

reached the same conclusion without resort to speculation or conjecture. Id. at 1–2, 456

S.W.3d at 391. We will not reverse the Commission’s decision unless we are convinced that

fair-minded persons with the same facts before them could not have reached the

Commission’s conclusions. Id. at 2, 456 S.W.3d at 391. Although we give deference to the

Commission on issues of the weight of evidence and credibility of witnesses, the Commission

may not arbitrarily disregard testimony and is not so insulated that it renders appellate review

meaningless. Durham v. Prime Indus. Recruiters, Inc., 2014 Ark. App. 494, at 2, 442 S.W.3d

881, 882–83.

III. Discussion

Under Arkansas Code Annotated section 11-9-105(a) (Repl. 2012), the “rights and

remedies granted to an employee subject to the provisions of [the Workers’ Compensation

Act], on account of injury or death, shall be exclusive of all other rights and remedies of the

employee, his legal representative, dependents, next of kin, or anyone otherwise entitled to

recover damages from the employer.” At issue in this case is whether FNA is a dual employer

of Humphries and therefore protected from suit by this exclusive-remedy provision.

In order to determine whether FNA enjoys immunity under the exclusive-remedy

statute, we must consider the so-called “dual-employment doctrine.” This doctrine

potentially comes into play in circumstances like those presented in this case, when a

temporary staffing agency “lends” an employee to another employer. In Daniels v. Riley’s

Health & Fitness Centers, 310 Ark. 756, 840 S.W.2d 177 (1992), the supreme court held that

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when a general employer lends an employee to a special employer, the special employer

becomes liable for workers’ compensation only if three conditions are satisfied: “(a) the

employee has made a contract for hire, express or implied, with the special employer; (b) the

work being done is essentially that of the special employer; and (c) the special employer has

the right to control the details of the work.” Daniels, 310 Ark. at 759, 840 S.W.2d at 178

(quoting 1C, A. Larson, The Law of Workmen’s Compensation, § 48.00 (1962)). When all three

of the above conditions are satisfied in relation to both employers, both employers are liable

for workers’ compensation. Id. Stated another way, the test established in Daniels is a three-

part conjunctive test. Gann v. CK Asphalt, LLC, 2023 Ark. App. 218, 666 S.W.3d 116.

All parties in this case appear to agree that there is no express contract for hire

between Humphries and FNA. Thus, in order to satisfy the first prong of the Daniels test, we

must determine whether there is an implied contract for hire. The existence of an implied

contract for hire is a factual question to be determined on the totality of the circumstances

surrounding the relationship of the claimant and the special employer. Randolph v. Staffmark,

2015 Ark. App. 135, 456 S.W.3d 389.

The Commission’s analysis of whether there was an implied contract between

Humphries and FNA focused on “which party controls the work being done.” See Est. of

Bogar v. Welspun Pipes, Inc., 2014 Ark. App. 536, 444 S.W.3d 405. The Commission cites

testimony from the hearing before the ALJ that FNA determined working hours, breaks, pay

rates, dress code, and who would be line leaders. It notes that FNA maintained the right to

assign worker tasks and the right to fire employees. In short, the Commission concluded that

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because FNA “had total control over all aspects of the work done in their facility, including

the quality of the work and how the work was performed,” the parties were operating under

an implied contract at the time of Humphries’s injury, and FNA was thus a dual employer

entitled to the protection of the exclusive-remedy doctrine.

The existence of an implied contract is not dependent solely on the nature of one

party’s control, however. Our supreme court set forth the standard for determining whether

an implied agreement exists in K.C. Properties of N.W. Arkansas, Inc. v. Lowell Investment

Partners, LLC, 373 Ark. 14, 280 S.W.3d 1 (2008):

In 1 Williston, Contracts § 3 (3d ed.1957) contracts implied in fact are treated
as true contracts arising from mutual agreements and intents to promise where the
agreement and promise have not been expressed in words and it is noted at page 11,
“The elements requisite for an informal contract, however, are identical whether they
are expressly stated or implied in fact.” The difference between an expressed contract
containing an actual promise and an implied contract where the contract is implied
from the conduct of the parties is merely in the mode of manifesting assent and in
the mode of proof. Both express and implied contracts are founded upon mutual
assent of the parties and require a meeting of the minds. 17 C.J.S. Contracts § 3 at pp. 553–
554 (1963) (quoting Crosby v. Hardeman, Inc., 414 F.2d 1 (8th Cir. 1969)).

Id. at 28–29, 280 S.W.2d at 13 (emphasis added). We have held that a contract implied in

fact derives from the “presumed” intention of the parties as indicated by their conduct. Steed

v. Busby, 268 Ark. 1, 7, 593 S.W.2d 34, 38 (1980) (citing Caldwell v. Mo. State Life Ins. Co.,

148 Ark. 474, 230 S.W. 566 (1921)). Stated differently, an implied contract is proved by

evidence of circumstances showing that through the general course of dealing between the

parties––here, Humphries and FNA––the parties intended to contract. City of Batesville v.

Independence Cnty., 2023 Ark. App. 401, 678 S.W.3d 35. Apart from its naked assertion that

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the parties were operating under an implied contract at the time of Humphries’s injury, the

Commission undertakes no analysis of what the parties intended.

As we examine the parties’ intents, Humphries’s intent was readily apparent from his

testimony. He emphatically stated that he never had the desire or intent to work for FNA.

Compare Randolph, 2015 Ark. App. 135, at 6, 456 S.W.3d at 393 (holding parties impliedly

intended to contract when both employee and special employer “operated on the belief that

Randolph would garner full-time employee benefits after he logged sufficient hours”).

Evidence of FNA’s intent can be gleaned from several sources. Of significance, we

note that the contract FNA signed with Labor Solutions contained FNA’s agreement that

none of Labor Solutions’ personnel would be deemed employees of FNA for any purpose

relating to the agreement. In addition, while witnesses from FNA testified that FNA generally

controlled the work that was done on its floor, none of them testified specifically as to FNA’s

relationship with Humphries. For example, Hickson testified that he did not know who put

Humphries on the baler on the day of his injury, who trained Humphries, or what specific

job duties he performed; Hickson further acknowledged that he had no interaction with,

training of, or control over Humphries, whom FNA concedes was a seasonal employee.

Moffett similarly testified that he was unaware of any training that FNA ever provided to

Humphries, and he could not name any person at FNA who directed Humphries from one

position to another. We find particularly telling Moffett’s testimony that because of the

contract stating Labor Solutions’ personnel were not to be considered FNA employees, FNA

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would reserve the right to deny that Humphries was its employee in any litigation context

other than workers’ compensation.

As stated above, the existence of an implied contract between FNA and Humphries

depends on the intent of the parties. See, e.g., Steed, supra. Each case depends on its own

particular facts. Ward v. Com. Constr. Co., Inc., 2024 Ark. App. 150, at 8, 686 S.W.3d 36, 42.

While we recognize that control over the work is an important factor in determining whether

an implied contract for hire exists under Daniels’s first prong, the mere exercise of control,

without mutual assent and a meeting of the minds between the employee and the special

employer, is insufficient to establish the existence of an implied contract. The specific facts

of this case fail to demonstrate that FNA and Humphries intended to enter into an implied

contract. Because the evidence failed to show the existence of an implied contract for hire,

FNA cannot satisfy the first prong of the three-part conjunctive test for dual employment

established in Daniels.

The Commission’s decision is therefore not supported by substantial evidence, and

we reverse and remand for proceedings consistent with this opinion.

Reversed and remanded.

GLADWIN and WOOD, JJ., agree.

Tim Cullen; Daniels Law Firm, PLLC, by: Shawn Daniels; and Hatfield Law Firm, by:

Jason Hatfield, for appellant.

Frye Law Firm, P.A., by: William C. Frye, for appellees.

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Quattlebaum, Grooms & Tull, PLLC, by: Vincent Chadick, for separate appellee FNA

Group, LLC.

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