The Arizona Court of Appeals Division One holds that an employee of a private contractor who provides health services in a state-owned prison is a statutory employee for purposes of Arizona’s workers’ compensation system.

A health services company had a contract with the Arizona Department of Corrections (“ADC”) to provide healthcare services at state-owned prisons.  A social worker employed by the health services company slipped and fell on an unmarked wet floor while working at one of the ADC prisons.  The social worker filed a workers’ compensation claim against the health services company and filed a negligence claim against the state.

The trial court granted summary judgment for the state on the basis that, under A.R.S. § 23-1022, workers’ compensation was the social worker’s only remedy for her injuries, and the court of appeals affirmed.  The court reaffirmed its two-part test for whether a party is an “employee” of an entity for purposes of workers’ compensation:  (1) whether the entity retained supervision or control over the party; and (2) whether the party’s work was a part or process of the entity’s trade or business.

Applying this test, the court concluded that the social worker was an “employee” of ADC for purposes of workers’ compensation.  It held, first, that ADC exercised sufficient supervision or control over the social worker because it controlled the provision of all health services within its prisons, maintained the facilities and fixtures related to health care services, influenced the health service provider’s staffing decisions, and otherwise monitored the social health service company’s activities.  Second, the court held that ADC is required to provide adequate health services to inmates and therefore providing healthcare was “part or process in” ADC’s trade or business.

Judge Catani delivered the opinion of the court, in which Presiding Judge Swann and Judge Kessler joined.