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Staffing Agency's Clients Not Covered, Insurer Says

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A cannabis staffing agency's insurance policy doesn't cover its client's employees, the insurer told a California federal judge in its bid for a pretrial win in its suit seeking to avoid coverage of a wrongful termination suit.

In its motion for summary judgment, Professional Solutions Insurance Co. argued Friday that its employment practices liability policy with Hybrid Payroll specifically excluded client companies and their employees, including the cannabis dispensary the Grove and owner Sean Patrick McDermott, who were named in an underlying state court suit filed by David Hyde.

Hyde worked for the Grove, a recreational and medical marijuana dispensary in La Mesa, California, on assignment from Ms. Mary Staffing, a Hybrid Payroll affiliate that provides staffing services for cannabis companies. He alleged that McDermott wrongfully fired him and then schemed with the Grove's receptionist to accuse him of sexual misconduct, according to court documents.

"The policy's client company/staffed employee exclusion unequivocally precludes coverage for the underlying suit because the underlying suit was brought by and maintained against the Grove, Hybrid's client company, and employees furnished to the Grove," PSIC wrote.



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