In a case currently being considered for publication, Janela v. Roman Asphalt Co., the issue of dual employment arose in the context of a government construction contract. The employer/paving company, Raebeck Construction won a contract for paving at Newark Liberty International Airport, which called for it to exercise direct control over the project and to certify that it did not share staff with any other company. On the date of the accident, an employee was struck in the head by a compressor and killed. His estate was paid dependency benefits by Raebeck. However, the estate also brought suit against another company, Roman, who actually did the paving work. It was revealed that contrary to the contract, Raebeck had no role in the job and essentially leased all workers from Roman. Raebeck did actually pay all of the workers, however. Roman moved for summary judgment on the exclusivity provisions of the Workers Compensation Act. The Appellate Division upheld the dismissal of Roman using a five part fact sensitive test focusing on the control exercised over the employees, to determine whether Roman was also an employer. It found that even though Raebeck violated specific government contract provisions to avoid this precise employment situation, bidding qualifications and contract requirements did not negate the legal rules governing workers’ compensation.
When analyzing a new claim involving dual employment, an immediate and comprehensive investigation of the employment relationship is essential. Obtaining documentation such as contracts, job descriptions, employment handbooks, payroll records, and even incorporation documents is an essential strategy in evaluating the claim. Also, early identification and interviews of the owners, managers and contractors can further assist in determining the degree of control each entity had over the injured worker.
On March 14, 2007, the New Jersey Appellate Division decided Valcarel v. FSA Management, A-40001-05T2 (Mar. 14, 2007)(Not Approved for Publication). The issue at bar was whether or not the claimant was “acting within the scope of his employment” when the accident occurred. The Appellate Division agreed with the Judge of Compensation (Judge Joel Gottlieb, New Brunswick) that the petitioner was engaged “on personal business when he was involved in the accident in question” and that no compensation would be payable.
The facts in Valcarcel are important to understanding the judges’ decision.
The claimant in Valcarcel was employed by FSA managing a residential apartment complex in Bridgewater. The petitioner was supplied with the use of a company vehicle (a Ford pickup truck). Occasionally the claimant would perform maintenance at other properties owned and operated by FSA.
The claimant also operated a personal business: home remodeling, which he pursued after normal work hours. FSA did not allow the claimant to use the Ford truck for his personal business.
On the date of accident the claimant was instructed to travel to Highland Park on behalf of his employer. Instead of driving straight to Highland Park, the claimant diverted his route and stopped at a private job site in Plainfield where he had been remodeling a private residence. After leaving that job site, the petitioner was involved in a motor vehicle accident in Plainfield.
Judge Gottlieb dismissed the claim petition, finding that the claimant had embarked on a personal errand. The petitioner argued that at the time of the accident, he was headed to Highland Park (as he had been originally instructed by his employer). The Appellate Division found this argument unpersuasive and upheld Judge Gottlieb, noting “that surely is not a dispositve fact, for it would logically signify that Valcarcel would likewise be entitled to coverage if, say, he had traveled several hours away for personal business to Cape May or to Connecticut before heading to Highland Park.”
It is a familiar story in New Jersey: immediately after Melard Manufacturing Corporation closed its Passaic plant, laying off 111 workers, 84 of the former employees promptly filed workers’ compensation claims alleging a variety of “occupational” maladies. (Melard, which manufactured plastic bathroom parts and packaged other items, laid off the workers in 2002.) The problem: the employees were represented by a single law firm, which filed identical complaints for each former employee, changing only the personally-identifying information on each court pleading. Melard filed a complaint in federal Court alleging Racketeer Influenced and Corrupt Organizations Act (RICO) violations by the employees and their lawyers – alleging that “fraudulent claims were being filed” and that “workers were being coached.” Melard claims that the workers gave false complaints to their physicians and that the lawyers who filed the claims solicited and developed the complaints. Melard argued that none of their workers ever filed a claim for pulmonary-related complaints before the plant closed and no worker claimed retaliation for filing a claim. Melard allegedly was told of this wrong-doing by a former employee who came forward.
The law firm that filed to complaints quietly settled with Melard (Ginarte, O’Dwyer, Winograd & Laracuente) for an ‘undisclosed’ sum. That left the federal lawsuit pending against the 84 factory workers who filed the allegedly fraudulent claims. On February 21, 2006, a default judgment was obtained against the workers, who did not appear or defend the case on their own behalf.
Three weeks later, Federal (U.S. District) Judge Stanley Chesler entered a judgment of $2,264,691 against the workers (of which $350,678 was attorneys’ fees for Melard’s lawyers).
The saga as it stands now? The lawyers who brought the claims settled their portion of the case and moved on. The 84 workers were not so lucky. The federal judgment against them, likely uncollectable, stands.
More interesting is the fate of the two former-employees who continued to pursue their workers’ compensation claims against Melard (and were provided a court-appointed attorney, Gregory Jachts, Esq.). Two of those claimant received awards of compensation after trial (Judge Beverly Karch, Presiding Judge of Comepnsation, Paterson). In other words, the Compensation Judge found that the claimants had compensable injuries. Nonetheless, under the terms of the RICO judgment, the awards obtained by the employee were the results of a tainted claim, and the employees who recovered owe Melard triple their award!
We will continue to follow this story as it develops.
Two cases decided in February 2007 examined the proofs in an occupational-disability case.
Credibility is King . . . Patel v. Federated Logistics, App. Div. February 7, 2007 (not approved for publication)
Petitioner Yogina Patel claimed that exposure to “dust, fumes, pulmonary irritants, bending, lifting and repeated manipulations” while working for three years as a checker in a dusty warehouse caused her to become permanently disabled.
During a full trial, the claimant presented the testimony of her physicians, who testified that the petitioner suffered from “inflammation of the soft tissues of the muscles” and “chronic bronchitis.”
The employer presented the testimony of its Human Resources manager, who disputed the claimant’s descriptions of the premises and her claims that the warehouse was “dusty.”
The Judge of Compensation dismissed the case, finding that the claimant’s description of the warehouse was not true and her complaints were therefore not credible.
Practice tip: In defending occupational disease claims, the testimony of an employer-representative to dispute specific facts asserted by the claimant may be powerful evidence for the defense.
. . . Objective Medical Evidence- Larsen v. City of East Orange, App. Div., February 13, 2007 (not approved for publication)
East Orange firefighter Kenneth Larsen brought a claim for occupational exposures to asbestos resulting in colon cancer and pulmonary disabilities which he alleged were related to his employment.
Both parties retained experts. During the trial, respondent’s expert admitted that he could “not rule out” the claimant’s workplace exposures as a possible cause of the Larsen’s cancer and disability.
There was no dispute that the claimant worked in a facility with “free asbestos” present.
Based upon the lack of disagreement between the experts and the presence of the admittedly cancer-causing substance in the workplace, the Appellate Division affirmed the decision of the Judge of Compensation finding a causal relationship between the cancer and the work exposures.
Quest Diagnostics of Lyndhurst, NJ is the biggest U.S. provider of workplace drug tests. Quest said that in 2006 positive results for workplace drug tests were the lowest since the company began testing.
Quest said that 3.8% of the 9 million tests administered came back positive.