NJ Worker's Tort Action Against Supply Company Fails on Exclusivity Grounds

A New Jersey appellate court affirmed a state trial court’s decision to grant summary judgment in favor of a defendant supply company in a civil action filed against it by a worker who sustained severe leg injuries in a forklift accident at the company’s warehouse [Hocutt v. Minda Supply Co., 2020 N.J. Super. LEXIS 201 (Aug. 7, 2020)]. The appellate court agreed that at the time of the injury, the worker was a special employee of the supply company and accordingly, the civil action was barred by the exclusive remedy provisions of the New Jersey Workers’ Compensation Act (“WCA”). The appellate court also agreed with the trial court that the worker had failed to show any facts that would support his alternative claim that the supply company was liable for an intentional tort.

Background

Minda Supply Co. (“Minda”) operated a warehouse that stored goods for the dry-cleaning industry. Forklifts were used at the warehouse to move pallets of supplies. Evidence suggested that it was a common practice at the warehouse for a worker to ride on the forklift, standing on either the front or back of the forklift while it was moving. That practice violates federal workplace safety regulations.

Minda used the services of an employee leasing agency, Express. Under the staffing agreement, Express was responsible for paying the loaned workers. Minda reimbursed Express for those wage payments and some additional charges. The staffing agreement specified that Minda would “supervise, direct, and control the work” of the employees loaned to Minda.

Hocutt registered with Express looking for work. Hocutt initially turned down several work opportunities that were offered by Express, eventually accepting an opportunity to work at Minda’s warehouse. On his second day working at Minda’s warehouse, Hocutt’s supervisor instructed him to team up with a forklift operator. Later that day, while Hocutt was riding on the back of the forklift — as he had seen others do — the operator inadvertently backed the forklift into an I-Beam, causing severe injuries to Hocutt’s leg. Following the accident, the U.S. Department of Labor Occupational Safety and Health Administration (OSHA) issued three citations to Minda.

Five-Pronged Test for Special Employees

The appellate court observed that in Kelly v. Geriatric & Medical Services, Inc., 287 N.J. Super. 567, 571-72 (App. Div. 1996), the court had developed a five-pronged test to assist courts in determining whether a worker was a special employee for purposes of the WCA. While not exclusive, the five-pronged test examines whether:

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.

Relying on Blessing v. T. Shriver & Co. 94 N.J. Super. 426, 436 (App. Div. 1967), Hocutt argued that the initial prong had not been satisfied. According to Hocutt, there was no direct evidence that he had entered into a contract of hire with Minda.

Implied Consensual Relationship

The appellate court disagreed, indicating that there was, at least, an implied consensual relationship between Hocutt and Minda. The court noted that the record showed that Hocutt turned down job offers from Express before accepting the opportunity to work at Minda’s warehouse. Hocutt’s decision to decline work offers was done without fear of reprisal from the agency as shown by the fact that Express continued to present work opportunities to Hocutt. Moreover, Hocutt accepted an offer to work at Minda’s warehouse and returned after the initial day. The court concluded that Hocutt impliedly consented to a special employee-employer relationship.

Not All Five Prongs Need Be Established

The court indicated further that the existence or absence of the first prong was not controlling since it was not necessary to establish all five factors for a worker to be deemed to be a special employee under the Kelly test. The court said that the remaining four prongs of the Kelly test did not appear to be in dispute, but all four were indeed established by the undisputed facts. Considering all of the Kelly factors, the appellate court concluded, as did the trial court, that Hocutt was a “special employee” of Minda. Hocutt’s status as a special employee thus subjected him to the exclusive remedy of workers’ compensation.

Intentional Tort Allegations – “Substantial Certainty” Test

The court observed that the New Jersey Supreme Court set the framework for the intentional tort analysis in Millison v. E.I. du Pont de Nemours & Co., 101 N.J. 161, 174 (1985)). There, the Court replaced the previous “deliberate intention” standard with a “substantial certainty” test. The court stressed, however, that under Millison, the statutory framework of the Act is not circumvented simply because a known risk later blossoms into reality. Something close to a virtual certainty was required [see Larson’s Workers’ Compensation Law, § 103.04].

To meet the Millison test, Hocutt had to establish that Minda’s supervisors knew that that its actions were substantially certain to result in injury or death to the employee. The plaintiff must further show that the resulting injury and the circumstances of its infliction were more than a fact of life of industrial employment and plainly beyond anything the Legislature intended the WCA to immunize.

OSHA Citation for “Willful” Violation Does not Equate with Intentional

The court acknowledged that following Hocutt’s injuries, OSHA had cited Minda for a “willful” violation of the safety standards. The court stressed, however, that the classification of the OSHA violation as willful did not necessarily mean that the conduct was intentional wrong for purposes of the WCA. The court said it interpreted the judicial precedents to mean that an employer’s longstanding practice of violating an OSHA regulation does not automatically rise to the level of intentional wrong. Rather the escalation to intentional wrong generally occurs when the repeated conduct is committed in disregard of prior OSHA citations or other warnings. In this case, there were no proofs submitted showing that there were prior forklift-related accidents or injuries, prior OSHA violations pertaining to forklift operations, a failure to abate such OSHA violations, or prior complaints from workers about forklift practices. Nor was any evidence presented that Minda took steps to conceal its violative practice or otherwise deceive safety investigators. Under these facts, the court determined that Hocutt failed to establish an intentional tort under the Millison standards.