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Branch v. Earth Tech

A-1562-03T2 (N.J. Super. App. Div. 2005) (Unpublished)

WORKERS’ COMPENSATION; SPECIAL EMPLOYEES—Under the New Jersey Workers’ Compensation Act, an employee may have two employers, but once the employee recovers workers’ compensation against one of the employers, he or she is barred from maintaining a tort action against the other employer for the same injury.

An environmental company was a general contractor on a project for the United States Environmental Protection Agency. The project required the company to clean up an environmentally contaminated site. The company entered into contract with an employment placement agency to hire several union workers for the project. That contract provided that the workers were employees of the agency and were not considered employees of the company during the project. All of the agency’s employees received day-to-day instructions from the company’s employees, but were paid directly by the agency. One of the agency’s employees was hired to clean up hazardous waster at the site. He was injured while unloading a truck at the job site and subsequently filed a workers’ compensation claim against the employment agency. He then filed a negligence action against the agency and the company. The company moved for summary judgment on the basis that it was immune from tort liability because the man was a “special employee” under the New Jersey Workers’ Compensation Act. The lower court agreed and granted summary judgment in favor of the company. The man appealed, asserting that the lower court erred in concluding that he was a special employee of the company under the Workers’ Compensation Act.

The Appellate Division affirmed the lower court’s ruling. In reaching its decision, it looked at the provisions of the Workers’ Compensation Act. Under the Act, a person may have two employers both of whom may be liable to pay workers’ compensation benefits. However, once the employee recovers workers’ compensation against one of the employers under the Act, he or she is barred from maintaining a tort action against the other employer for the same injury. In this case, the environmental company asserted that the man was barred from maintaining the tort action because he was a “special employee” of the environmental company at the time of the accident. Although not directly hired by an employer, a person may still be considered a “special employee” of that emmployer if all of the following factors are present: 1) the employee has made a contract of hire, express or implied, with the special employer; 2) the work being done by the employee is essentially that of the special employer; 3) the special employer has the right to control the details of the work; 4) the special employer pays the employee’s wages; and 5) the special employer has the power to hire, discharge or recall the employee. The Court found the first factor was present because there was an implied contract of hire by the man accepting the work and being under the direct control and supervision of the company. It found that the second factor was present because the man was performing the work of the company. The third factor was present because, at all times, the environmental company had the right to control the detail of the man’s work. Lastly, it found that the last two factors were present because the man was indirectly paid by the company and the company had the power to discharge or recall the man. As a result, it concluded that the man was a special employee of the company pursuant to the Act and therefore was barred from suing the company for tort liability because he had already recovered workers’ compensation from the agency.


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