CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT.
Marshall, J., delivered the opinion of the Court, in which Burger, C. J., and White, Powell, and Rehnquist, JJ., joined. Stewart, J., filed an opinion concurring in the judgment, post, p. 332. Douglas, J., filed a dissenting opinion, in which Brennan, J., joined, post, p. 333. Blackmun, J., filed a dissenting opinion, post, p. 341.
MR. JUSTICE MARSHALL delivered the opinion of the Court.
Petitioner Eugene Kelley was seriously injured when he fell from the top of a tri-level railroad car where he had been working. He sought recovery for his injuries from the respondent railroad under the Federal Employers' Liability Act (FELA), 35 Stat. 65, as amended, 45 U. S. C. §§ 51-60. Under the FELA, a covered railroad is liable for negligently causing the injury or death of any person "while he is employed" by the railroad. Although petitioner acknowledged that he was technically in the employ of a trucking company rather than the railroad, he contended that his work was sufficiently under the control of the railroad to bring him within the
coverage of the FELA. The District Court agreed, but the Court of Appeals for the Ninth Circuit reversed, 486 F.2d 1084 (1973), creating an apparent conflict with a previous decision of the Fourth Circuit, Smith v. Norfolk & Western R. Co., 407 F.2d 501, cert. denied, 395 U.S. 979 (1969).*fn1 We granted certiorari to resolve the conflict. 416 U.S. 935 (1974). We vacate the judgment and remand the case for further proceedings in the District Court.
At the time of his accident, petitioner had worked for the Pacific Motor Trucking Co. (PMT), a wholly owned subsidiary of the Southern Pacific Co., for about eight years.*fn2 PMT was engaged in various trucking enterprises, primarily in conjunction with the railroad operations of its parent company. Among PMT's functions was transporting new automobiles from respondent's San Francisco railyard to automobile dealers in the San Francisco area. As part of its contractual arrangement with
the railroad, PMT would unload automobiles from Southern Pacific's "tri-level" auto-carrying flatcars when they arrived in the yard. It was petitioner's job to unhook the automobiles from their places on the railroad cars and to drive them into the yard for further transfer to PMT auto trailers. PMT maintained the unloading operation in the yard on a permanent basis. Although there were Southern Pacific employees in the area who would occasionally consult with PMT employees about the unloading process, PMT supervisors controlled and directed the day-to-day operations.
On July 3, 1963, petitioner was unhooking automobiles in the usual fashion from the top level of one of the tri-level flatcars. A safety cable, normally affixed to the flatcar to protect against falls, was apparently not in place because of an equipment defect. During the unhooking process, petitioner fell from the top of the car and suffered a disabling injury. He subsequently received workmen's compensation payments from PMT. Shortly before the three-year FELA statute of limitations had run, he brought suit against the respondent,*fn3 claiming it had been negligent in failing to maintain the safety cable in its proper place and in proper working order.
In his complaint, petitioner alleged that he was employed by the respondent railroad within the meaning of the FELA. After a six-day hearing, the District Court, sitting as trier of fact,*fn4 ruled in petitioner's favor on the employment question. The job of unloading
automobiles was the railroad's responsibility, the court found, "pursuant to its contractual responsibilities to the shippers and its tariff responsibilities." In addition, the court found that the railroad supplied the necessary ramps and owned the area in which the PMT employees worked. The responsibility for supervision and control of the unloading operations was respondent's, the court concluded, even though "the exercise thereof was executed by employees of Pacific Motor Trucking Company." In sum, the court found that PMT was serving generally as the railroad's agent; PMT employees were agents of the railroad for the purposes of the unloading operation; and because the work being performed by petitioner was "in fulfillment of a non-delegable duty of defendant Southern Pacific Company," the relationship between petitioner and the railroad was sufficient to bring him within the coverage of the FELA. After this resolution of the employment issue, the railroad stipulated to its negligence, the parties agreed to set damages at $200,000, and the trial court entered judgment for petitioner in that amount.
The Court of Appeals observed that the District Court had not found that petitioner was "employed" by the railroad, either permanently or at the time of his accident. The court noted that the "while employed" clause of the FELA requires a finding not just of agency but of a master-servant relationship between the rail carrier and the FELA plaintiff. Concluding that the District Court had applied an unduly broad test for FELA liability, the Court of Appeals reversed the District Court's judgment.
Petitioner insists that the District Court in effect made a factual finding of employment and that the Court of Appeals erred in upsetting that finding. Of course, even
if the District Court made such a finding of employment after applying the proper principles of law, that would not be the end of the matter. Under Fed. Rule Civ. Proc. 52 (a), an appellate court must set aside the trial court's findings if it concludes that they are "clearly erroneous." See United States v. United States Gypsum Co., 333 U.S. 364, 394-395 (1948). We need not reach the question whether any of the District Court's findings in this case were clearly erroneous, however, since we agree with the Court of Appeals that the trial court applied an erroneous legal standard in holding that the plaintiff was within the reach of the FELA. United States v. Singer Mfg. Co., 374 U.S. 174, 194 n. 9 (1963).
The heart of the District Court's analysis was its conclusion that the "traditional agency relationship" between respondent and PMT, in conjunction with the master-servant relationship between PMT and petitioner, was sufficient under the circumstances of this case to bring petitioner under the coverage of the Act. But this Court has repeatedly required more than that to satisfy the "while employed" clause of the FELA. From the beginning the standard has been proof of a master-servant relationship between the plaintiff and the defendant railroad. See Robinson v. Baltimore & Ohio R. Co., 237 U.S. 84, 94 (1915); Hull v. Philadelphia & Reading R. Co., 252 U.S. 475, 479 (1920); Baker v. Texas & Pacific R. Co., 359 U.S. 227, 228 (1959).
In an early FELA case, this Court noted that the words "employee" and "employed" in the statute were used in their natural sense, and were "intended to describe the conventional relation of employer and employe." Robinson, supra, at 94. In Baker, supra, the Court reaffirmed that for the purposes of the FELA the question of employment, or master-servant status, was to be determined by reference to common-law principles. The
Court in Baker referred to sections of the Restatement (Second) of Agency dealing with the borrowed-servant doctrine and the general master-servant relationship as a guideline for analysis and proper jury instructions.*fn5 Section 220 (1) of the Restatement defines a servant as "a person employed to perform services in the affairs of another and who with respect to the physical conduct in the performance of the services is subject to the other's control or right to control." In § 220 (2), the Restatement recites various factors that are helpful in applying that definition. While that section is directed primarily at determining whether a particular bilateral arrangement is properly characterized as a master-servant or independent contractor relationship, it can also be instructive in analyzing the three-party relationship between two employers and a worker.
Under common-law principles, there are basically three methods by which a plaintiff can establish his "employment" with a rail carrier for FELA purposes even while he is nominally employed by another. First, the employee could be serving as the borrowed servant of the railroad at the time of his injury. See Restatement (Second) of Agency § 227; Linstead v. Chesapeake & Ohio R. Co., 276 U.S. 28 (1928). Second, he could be deemed to be acting for two masters simultaneously. See Restatement § 226; Williams v. Pennsylvania R. Co., 313 F.2d 203, 209 (CA2 1963). Finally, he could be a subservant of a company that was in turn a servant of the railroad. See Restatement § 5 (2); Schroeder v. Pennsylvania R. Co., 397 F.2d 452 (CA7 1968).
Nothing in the District Court's findings suggests that petitioner was sufficiently under the control of respondent to be either a borrowed servant of the railroad or a dual servant of the railroad and PMT.*fn6 The District Court's findings come closest to suggesting a subservant relationship running from the railroad through PMT to petitioner. But even that theory fails on the findings in the trial court, since those findings did not establish the master-servant relationship between respondent and PMT necessary to render petitioner a subservant of the railroad.
The District Court found that PMT employees exercised supervision and control over the unloading operations, although the railroad bore the "responsibility" for those functions. On these facts, the District Court was plainly correct in concluding that PMT was an agent of the railroad. But a finding of agency is not tantamount to a finding of a master-servant relationship. See Restatement (Second) of Agency § 2. The finding that the railroad was "responsible" for the unloading operations is significantly weaker than would be a finding that it controlled or had the right to control the physical conduct of the PMT employees in the course of their unloading operations. The railroad would satisfy the District Court's "responsibility" test whenever it agreed to perform a service
and subsequently engaged another company to perform that service for it on its premises. The "control or right to control" test, by contrast, would be met only if it were shown that the role of the second company was that of a conventional common-law servant.*fn7 Accordingly, we agree with the Court of Appeals that the District Court's test for FELA coverage was too broad.
The dissenters argue that even if the District Court erred in defining the applicable legal standard, we should reverse the Court of Appeals and reinstate the judgment of the District Court. The facts found by the District Court, they contend, satisfied the requirements of ...