Indemnity Agreement Precludes Temporary Employee Provider’s Recovery of Workers’ Compensation Claim Payments in Illinois
The plaintiff, a temporary employee provider, signed an indemnity agreement with the defendant, a company that “borrowed” the temporary employees, agreeing to indemnify the defendant “against any and all claims” asserted by the temporary employees “as a result of or incidental to the work performed.” The temporary employee provider alleged it was due $1.6 million under the Illinois Workers’ Compensation Act, which provides that, absent an agreement to the contrary, an employee loaner must be reimbursed by the employee borrower for amounts paid for workers’ compensation claims. Relying on the clear language of the parties’ indemnity agreement, the U.S. District Court for the Northern District of Illinois flatly rejected the temporary employee provider’s claims and granted summary judgment for the defendant, finding the agreement clearly constituted an “agreement to the contrary” as contemplated by Illinois law such that the temporary employee provider was contractually obligated to indemnify the employee borrower for all claims, including workers’ compensation claims.
