Tennessee Exclusive Remedy Has Two Lanes. Which One Protects Your GC?

Two Tennessee court decisions, handed down five months apart, split the state's exclusive remedy doctrine into two lanes. One protects companies that host staffing-agency workers from tort suits. The other strips that protection away. If you're a construction GC in Tennessee using temporary labor, the gap between these two rulings could be the gap between a workers' comp claim and a six-figure negligence judgment.

The construction industry needed 439,000 new workers in 2025 and still faces a shortfall of 349,000 in 2026 (Associated Builders and Contractors, January 2026). That shortage pushes GCs toward staffing agencies, labor brokers, and vendor-provided installation crews. Tennessee's courts just told you that not all of those arrangements carry the same legal shield.

How Tennessee exclusive remedy works

Tennessee's Workers' Compensation Law (TCA § 50-6-108) makes workers' comp the exclusive remedy for workplace injuries. An injured worker gets benefits. The employer gets immunity from tort suits. The trade-off is clean when the worker is a direct W-2 employee of the company where the injury happens.

It gets complicated when the worker is on one company's payroll but performing work at another company's site. Tennessee uses two doctrines to sort this out: the loaned servant doctrine and the statutory employer test under TCA § 50-6-113. Until late 2025, the boundary between these doctrines was blurry. Two recent rulings sharpened it.

The protected lane: King v. Dayco

Keith King worked as a forklift operator at Dayco's manufacturing facility in Shelby County. He was employed by Pro-Man Staffing Solutions, a temp agency. In June 2023, King's forklift drove over plywood and fell through the floor. He collected workers' comp from Pro-Man, then sued Dayco in tort for $150,000.

The Court of Appeals of Tennessee said no. In its April 29, 2026 decision, the court applied the loaned servant doctrine and found all three elements of co-employment: Dayco had an implied agreement with King to perform work, the work was essentially Dayco's own operations, and Dayco controlled the details. Dayco supervisors assigned King's daily tasks, set his schedule (Monday through Friday, 6 a.m. to 2:30 p.m., minimum 40 hours), and provided every tool he used.

The staffing contract between Pro-Man and Dayco explicitly disclaimed any employer-employee relationship. The court wasn't persuaded. "Operational control comes with legal consequences, and no clause in a vendor agreement can change that" (King v. Dayco, Tenn. Ct. App., April 2026).

For construction GCs, this is the lane you want. When your company exercises genuine operational control over a temp worker's daily tasks, tools, and schedule, Tennessee courts treat you as a co-employer. Workers' comp exclusivity applies. The injured worker can't bring a separate negligence suit against you.

The exposed lane: Coblentz v. Tractor Supply

Brian Coblentz worked for Stanley National Hardware, which sold products to Tractor Supply stores. Part of his job involved visiting stores to check inventory and maintain product displays. During one visit, a barn door track from a Stanley National display fell on him. He collected workers' comp from Stanley National, then sued Tractor Supply for negligence.

The Tennessee Supreme Court, in its December 22, 2025 decision, held that Tractor Supply was not Coblentz's statutory employer. The court adopted a "predominant purpose" test: when the predominant purpose of the arrangement is selling merchandise, with service being incidental, the relationship is vendor-vendee. Not contractor-subcontractor. The word "subcontractor" in TCA § 50-6-113(a), the court found, refers to entities performing labor or services, not entities delivering and stocking their own products (Coblentz v. Tractor Supply, Tenn. S. Ct., December 2025).

This matters for construction. GCs regularly have vendor representatives on job sites. Equipment dealers send technicians to demonstrate or install products. Material suppliers send crews to stage deliveries. If those relationships look more like product sales with incidental on-site labor, Coblentz says exclusive remedy doesn't shield the GC. A tort suit stays on the table.

Why the labor gap makes this a mod problem

The 349,000-worker construction shortfall projected for 2026 (ABC) doesn't just mean hard-to-fill positions. It means GCs are filling gaps with staffing agencies, vendor-provided labor, and arrangements that blur the line between contractor and vendor. Each arrangement now falls into one of Tennessee's two legal lanes.

When exclusive remedy holds (the King v. Dayco track), the claim stays inside workers' comp. It hits your experience mod, but the exposure is contained. When exclusive remedy fails (the Coblentz track), you face tort liability that workers' comp doesn't cap. And the underlying WC claim still lands on your mod worksheet regardless. You absorb both: the comp claim on your mod and a tort judgment on your balance sheet.

In our reviews of Tennessee contractor worksheets, the pattern we see most often is a GC who doesn't distinguish between staffing arrangements and vendor arrangements when evaluating exposure. They treat all third-party workers the same. These two rulings say Tennessee courts won't.

What an audit would check

An audit would review how third-party labor relationships are classified on the current worksheet, whether claims from workers provided by staffing agencies or vendors are coded to the correct policy, and whether reserves tied to a Coblentz-type arrangement have been allocated to the right party. Most contractors we review haven't mapped their vendor relationships against the two-track framework that these decisions established.

If you're a Tennessee GC running temp labor or hosting vendor crews on your sites, your mod worksheet may already reflect exposures you haven't classified. Send us your NCCI worksheet and we'll review it at no cost.