New Jersey's Compensation Courts determine issue of Employment.

Injured employees frequently try to escape the jurisdiction of the Workers’ Compensation Act by claiming they fit an “exception” to the universal coverage of the law They typically claim either they

  • were not an employee; or
  • they were intentionally harmed by their employer.

Their goal is to sue the employer in civil court, where they can win a higher money award. A new case demonstrates this brilliantly: in the civil court, the estate of a killed employee won $525,000 from a sympathetic jury. The case was ultimately reversed and sent to the Workers’ Compensation Court, where under the workers’ compensation law, the estate was entitled only to a cash payment of $3,500 (for reimbursement of funeral costs).

The Facts

The facts come from a newly-decided case, Estate of Myroslava Kotsovska, by Olena Kotsovska (Decided December 26, 2013). A civil claim was filed by the estate of Myroslava Kotsovska, who claimed that while working for Saul Liebman (81 years old) as a personal aide, she was run over by Liebman and killed. Liebman admits that while Kotsovska was working for him as a personal aide, he lost control of his vehicle, struck her, severed her leg, and ultimately killed her. However, he claimed that although she was working “off the books” for $100 per day as a personal aide/attendent, she was nonetheless his “employee” and therefore any money judgement she obtained from him should be in the workers’ compensation court, not the civil court.

The case was tried before a jury in civil court, who awarded the estate $525,000 for Kotsovska’s pain and suffering.

The defendant appealed the decision, arguing that the plaintiff was really his employee, and that any claim she had should have been adjudicated by the workers’ compensation court. This argument was raised because the total award available for a death claim in the workers’ compensation courts would have been much lower. In this case, where the decedent was 59 years old, apparently unmarried, and does not appear to have any direct dependents, the award under the Workers’ Compensation Law (N.J.S.A. 34:15-13) would have been limited to $3,500 (burial expense) plus the costs of final medicla treatment. In other words, much less then what the estate recovered before a jury.

The Law

The Division of Workers’ Compensation has the exclusive original jurisdiction of all claims for workers’ compensation benefits in New Jersey.

N.J.S.A. 34:15-49 mandates that all questions of compensability be adjudicated in the Division. It states

“The Division of Workers’ Compensation shall have the exclusive original jurisdiction of all claims for workers’ compensation benefits under this chapter.”

As a matter of fact, much of the law of compensability arises in matters in which exclusivity is raised as an affirmative defense to claims for personal injury or death in Superior Court. In such cases, a defendant in a civil case will state that the claim should be properly heard in the Workers’ Compensation Court, not in the Superior (civil) Court. Why would a defendant do this? Because awards in a civil proceeding are generally much higher than the statutory allowances provided to injured workers under the New Jersey Act.

Who is an “Employee” under the Workers’ Compensation Law?

The term employee is “liberally construed” by Workers’ Compensation Judges to bring as many persons as possible within the coverage of the Act. Therefore, a variety of working relationships have been held to be covered by the Act, including those not necessarily confined to traditional employment settings. In this case, it was clear that the alleged employee

  • was being paid “cash” at a rate of $100 per day;
  • her employment was “off the books,” and
  • she was an undocumented worker with no legal right to work in this country.

The question.

In this case, the Superior Court (civil court) went ahead and tried the case, ultimately finding that the estate of the decent was entitled to a pain-and-suffering award. In this matter the defendent filed an Answer setting forth the affirmative defense that the claim should have been dismissed as it was covered by the New Jersey Workers’ Compensation Act, and then followed up with a motion to dismiss based on lack of jurisdiction. The Superior Court found that because the time limit to file a death claim had expired (two years from date of death) by the time the Motion was filed, the matter could not be referred over to the Division of Workers’ Compensation.

The ruling.

The Appellate Court reversed the trial decision awarding $525,000 to the estate of Myroslava Kotsovska, finding that the issue of “employment” should have been decided first by the Workers’ Compensation Law Judge.

Understanding the Courts reasoning.

The controlling statutory law is straightforward: determinations of whether or not an alleged employment is covered by the Workers’ Compensation Act must be decided by a workers’ compensation judge. The Court ruled that vesting exclusive jurisidciton in the Division of Workers’ Compensation would avoid the confusion where the Superior Court and the Compensation Court reach differing conclusions on the issue of employment. Of course, there will be situations (for example, where the workers’ compensation court does not have jurisidiction over one of the parties, such as a party dragged into the civil claim and raising a fellow-servant defense) but the Appellate Panel resolved those by finding that those claims could be heard simultaneously in the Superior Court.

Case: Estate of Myroslava Kotsovska, by Olena Kotsovska, A-5512-11T4 (N.J. Super. Ct. App. Div. 2013).

Greg Lois is the managing partner of LOIS LLC, a 19-attorney law firm dedicated to defending employers and carriers in New York and New Jersey workers' compensation claims. Greg is the author of a popular series of "Handbooks" on workers' compensation, and is the co-author of the 2016 Lexis-Nexis New Jersey Workers' Compensation Practice Guide. Greg can be reached at 201-880-7213 or glois@lois-llc.com