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Behrens v. Environmental Systems

Claim Pet. 2004-51 (D.O.L., Div. of Workers' Comp. 2004) (Unpublished)

WORKERS COMPENSATION; INDEPENDENT CONTRACTORS—Even if an individual is employed full time elsewhere and even if that person has signed an “independent contractor” agreement for part time work with a contractor, the worker can still be considered as an employee, especially where the contractor admittedly enters into many similar arrangements to save money on benefits.

An employee worked full-time for the state, but regularly worked part-time jobs to supplement his income. On the second day of a part-time job, he was injured while driving a company pick-up truck to a job site when a tractor-trailer rear-ended him. The employee filed a workers compensation claim. His part-time employer claimed that the employee was an independent contractor and not its employee as defined by N.J.S.A. 34:15-36, and it was not responsible for workers’ compensation benefits. The Workers’ Compensation judge disagreed. Although the accident occurred on the employee’s second work day, he felt both the employer and the employee had a clear expectation of an ongoing employment relationship. The employee regularly worked part-time jobs to supplement his income, and the employer routinely hired part-time help. Specifically, the employer hired the man to replace another part-time employee who had recently left. For those reasons, the judge concluded that this hiring was not a sporadic working relationship of the kind that would keep the employee from receiving workers compensation benefits.

In support of its contention that the injured worker was an independent contractor, the employer offered into evidence a Subcontractor Agreement Form, which set forth that the employee would provide subcontractor services on an as needed basis, would provide his own health, workers compensation, general disability, and liability insurance. The form also stated that the employee would release the company from any and all liability. The form was one paragraph, filled with spelling and grammatical errors, and although the employee admitted that his signature was on it, he did not remember signing it.

The judge concluded that the form agreement was a contract of adhesion. The employee had no recollection of having signed the document, which suggested that there was no meaningful discussion of the subject. Furthermore, the judge held that the document fell far short of the waiver requirements of N.J.S.A. 34:15-9. The employer’s own testimony revealed that its primary concern was the cost of insurance and that it intended to have the employee look to his own private health insurance plan in the event of an injury. The company also admitted that even though the form required proof of insurance by the employee, the employer did not require him to produce such evidence before beginning the job. For those reasons, the judge concluded that the form was an attempt to circumvent the requirements of the Workers’ Compensation Act.

In determining whether there is an employer-employee relationship or whether one is an independent contractor, courts apply the “Control Test” or the “Relative Nature of Work Test.” Here, the judge held that neither test could be used to conclude that the employee was an independent contractor at the time of the accident. The employer was engaged in the business of removing underground oil storage tanks. The employee’s role was to assist in securing a tank while the employer used a backhoe to remove it from the ground. The judge determined that the employee exercised no control over the time or manner in which the work was performed.

In this business relationship between the employee and the injured worker, the employee was entirely dependent upon the worker for any economic benefit. The employer controlled the hours that he worked and the rate of pay based on those hours. Furthermore, the newspaper advertisement used by the employee asked for a part-time laborer and not for a subcontractor. The employer even had the employee perform miscellaneous tasks around the office so that it could evaluate his work ethic before hiring him. The employee had no equipment of his own; the employer provided everything, including the vehicle in which he was injured.

For these reasons, the judge found the injured worker to be an employee, and held that his injuries were compensable.

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