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Paton v. Purepac Pharmaceutical Company

A-4933-03T3 (N.J. Super. App. Div. 2005) (Unpublished)

WORKERS COMPENSATION; SPECIAL EMPLOYEES — Under the New Jersey Workers’ Compensation Act, an employee that has two employers may not recover workers’ compensation benefits against one employer when he or she has already obtained a judgment against the other employer for the same injury.

A woman worked as a bench chemist at a pharmaceutical company. She was hired as a contract worker through a temporary job placement agency. The pharmaceutical company had an agreement with the agency under which the agency billed the company for work performed by the woman. If any employment issues arose with the woman, the company was to contact the agency and the woman would be terminated. While on the job, the woman suffered severe injuries when she inhaled toxic fumes. The woman filed a workers’ compensation claim against the agency. The company was later impleaded in the case. The woman obtained a judgment against the agency and the action was dismissed against the company pursuant to a consent order. The woman then filed a tort action against the company for the injuries she sustained. In response, the company moved for summary judgment on the basis that the woman’s claim was barred by the exclusive remedy provision of the New Jersey Workers’ Compensation Act because she had already obtained a judgment against the agency. The lower court agreed that the woman’s action was barred and granted summary judgment for the company. The woman appealed.

The Appellate Division affirmed the lower court’s ruling. It found that an employee may have two employers, each liable for workers’ compensation. Under the Workers’ Compensation Act, recovery of workers’ compensation benefits against one employer bars the employee from maintaining a tort action against the other employer for the same injury, but a special employment relationship must exist between the employer and employee in order for the employee to be precluded from maintaining a tort action. The Court set forth five factors to consider when evaluating whether a special employment relationship exists as follows: 1) the employee has made a contract of hire with the special employer; 2) the work performed 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 applied these factors and found that the woman had made a contract for hire with the pharmaceutical company. It further found that the woman performed the company’s work, the pharmaceutical company controlled the details of her work, and the pharmaceutical company had the ability to discharge her. It concluded that a special employment relationship had been formed and therefore the woman was barred from maintaining a tort action against the company because she had already obtained a judgment against the temporary employment agency for her injuries.


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