Ransberg v. Erdner Brothers, Inc.

A-3954-98T2 (N.J. Super. App. Div. 2000) (Unpublished)
  • Opinion Date: March 16, 2000

EMPLOYER-EMPLOYEE; WORKERS’ COMPENSATION—A “special employee,” i.e, one borrowed from a “general employer,” is an employee of both the “general” and the “special” employer and each employer may be liable under the workers compensation law.

For the purpose of workers’ compensation, New Jersey law allows an employee to have two employers, both of whom may be liable under the workers’ compensation law. A workers’ compensation recovery against one of the employers bars the employee from maintaining a tort action against the other for the same injury. An employer that borrows an employee from another company is a special employer and the employee is a “special employee.” Under case law, there is a fact sensitive five-prong test for “special employees.” The test is: “(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.” In this case, an individual was engaged to paint a roof. During a break, he sat down on a skylight. The skylight collapsed and he fell to the floor below and was killed. The building was owned by one company and leased by a related company. Both corporations enjoyed common officers, directors, and management and were operated as one and the same. All of the employees were on the tenant’s payroll but those who performed services for the property owner were considered leased to or borrowed by the property owner. The salaries for those who performed services for the property owner were reimbursed to the tenant. Applying the five-prong test, the Court found that the decedent had an implied employment relationship with the property owner, the special employer. Although the decedent presumably did not know who owned the building, he did know that the supervisor was the warehouse manager and had the right to control the details of his work and in fact did. The painting work being done by the decedent was essentially work for the building owner. The warehouse manager and the building owner had the right to control the details of the work. While the tenant directly issued the payroll check for the decedent’s work, the building owner reimbursed the tenant and therefore effectively paid the decedent’s wages. Lastly, the decedent was hired at the warehouse manager’s direction. Under the circumstances, the Court was satisfied that the decedent was a general employee of the tenant and a special employee of the property owner and that the tort claim made on his behalf was barred by the workers’ compensation law.