Brian Coblentz et al. v. Tractor Supply Company

In this appeal, we consider whether a retail store purchaser of products can be a “statutory employer” of the product vendor’s injured employee under Tennessee’s workers’ compensation statutes, potentially secondarily liable for the employee’s workers’ compensation benefits, and also protected under the exclusive remedy provision. Resolving this issue requires us to answer a threshold question: whether the term “subcontractor” in Tennessee Code Annotated section 50-6-113(a) includes a product vendor who engages in only the sale and ancillary delivery of merchandise. We hold that it does not. We hold that the term “subcontractor” in section 50-6-113(a) refers to a person or entity that performs labor or services for another; section 50-6-113(a) does not apply to a pure vendor-vendee relationship. To determine whether a vendor-vendee arrangement that includes services beyond the sale and ancillary delivery of merchandise is governed by section 50-6-113(a), we adopt a version of the “predominant purpose” test often utilized in connection with the Uniform Commercial Code to ascertain whether a contract is predominantly for the sale of goods or services. In this case, there was an arrangement between a product vendor and the defendant retail store that required the vendor’s sales employee to perform services other than ancillary delivery of purchased merchandise. Applying the predominant purpose test, we hold that the predominant purpose of the arrangement was for the product vendor to sell merchandise to the retail store. Any additional services rendered were incidental to the vendor’s sale of merchandise to the retail store. Accordingly, the relationship between the plaintiff’s employer and the defendant retail store was one of vendor-vendee, not principal-subcontractor, and is outside the ambit of section 50-6-113(a). For that reason, the defendant retail store is not the plaintiff’s statutory employer for purposes of section 50-6-113(a) and is not shielded from the plaintiff’s injury claims by the exclusive remedy provision of the workers’ compensation statutes. Accordingly, we reverse the Court of Appeals’ judgment and remand the case to the Court of Appeals for further proceedings not inconsistent with this Opinion.