January 1, 1900

by Edward H. Herman

Employers often inquire whether they can be sued by an employee in tort rather than relying on workers’ compensation as the exclusive remedy should an injury occur in the workplace. The "short" answer is that employees are limited to workers’ compensation benefits. Having said that, an employer would be wise to become aware of those situations that will give rise to liability in tort since a failure to do so could lead to financial ruin for the employer. This very issue has been the subject of much litigation in New Jersey and elsewhere in recent months as injured employees seek to erode the protection afforded to the employer by the "exclusivity rule".

Workers’ Compensation in New Jersey is statutory social legislation and is the legislative expression of a desire to care for injured workers swiftly, without costly protracted litigation. Workers’ Compensation insurance is mandatory for all employers, and N.J.S.A. 34:15-8 provides that this requirement "shall be a surrender by the parties thereto of their rights to any other method, form or amount of compensation or determination thereof than as provided by this article."

Early on, our Supreme Court stated in Ramos v. Browning Ferris Industries, "Fundamental to the Act is the premise that by accepting the benefits provided by its schedule of payments, the employee agrees to forsake a tort action against the employer." However, the second paragraph of N.J.S.A. 34:15-8 sets forth the limited exception to the "exclusivity rule". Under this provision, an employee may sue an employer for any behavior, act or omission that is an "intentional wrong". The challenge to the "exclusivity rule" revolves around the definition of an "intentional wrong".

In 1985, our Supreme Court in Millison v. E.I. duPont Nemours dealt with the categories of employer conduct which would be sufficiently flagrant to constitute an "intentional wrong" and thus avoid the exclusivity bar of the Workers’ Compensation law. In Millison, the employee alleged that their employer knowingly and deliberately exposed them to hazardous work environment (asbestos exposure) and fraudulently concealed existing occupational diseases from the employees. At that time, the Court held that only an employer’s deliberate intent to injure would avoid the exclusive workers’ compensation remedy and went on to develop the "substantial certainty" rule. Not only must the court find that the employer acted deliberately, but it must also find that the very injury was a substantial certainty to occur.

Approximately 17 years later, our Supreme Court, in Laidlow v. Harition Machinery Company, Inc. was again confronted with an intentional wrong theory in a products liability tort action. In this case, the employee lost much of his left hand in a rolling mill accident after the employer effectively removed a machine guard. The court concluded that the removal of a safety guard may indeed cause the employer to loose the immunity in tort afforded by workers’ compensation, but the analysis must be on a case by case basis. The Court wrote:

"...as a practical matter, when an employee sues an employer for an intentional tort and the employer moves for summary judgment based on the Workers’ Compensation bar, the trial court must make two separate inquiries. The first is whether, when viewed in a light most favorable to the employee, the evidence could lead a jury to conclude that the employer acted with knowledge that it was substantially certain that a worker would suffer injury. If that question is answered affirmatively, then the court must then determine whether, if the employee’s allegations are proved, they constitute a simple fact of industrial life or are outside the purview of the conditions the Legislature could have intended to immunize under the Workers’ Compensation bar. Resolving whether the context prong of Millison is met is solely a judicial function·"

Since the decision in Laidlow by the Supreme Court, the Appellate Courts have twice reviewed similar issues. In Crippen v. Central Jersey Concrete Pipe Co., the Court upheld summary judgment in favor of the employers since it found that the record provided no basis for establishing an intentional wrong by either an intent to injure or knowingly exposing the employee to risk that was substantially or virtually certain to result in harm. In so finding, the Court noted that the exclusivity bar of the Workers’ Compensation Act was still the law in New Jersey. Later in Tomeo v.Thomas Whitesell Construction Co., Inc. the Court reversed a jury award of $160,000.00 to the injured employee finding that although the employer committed an intentional wrong by removing a safety item, there was insufficient proof as to the "virtual certainty" of harm to the employee by the removal of the safety device.

These decisions make it clear that the employer can no longer act in such a manner so as to intentionally put their employee in danger, while knowing that it is a virtual certainty that the employer’s actions will lead to the very injury suffered by the employee.

While Workers’ Compensation may still be the "exclusive" remedy for an employee, recent case law analyzing the two pronged test established by our Supreme Court raises questions as to the remedy’s protection to the employer. There can be no doubt that plaintiffs in New Jersey have set their sights on the erosion of the exclusivity remedy of the Workers’ Compensation Act. The only question is whether they will succeed and when.

Edward H. Herman is a partner of Hill Wallack and partner-in-charge of the Workers’ Compensation Practice Group. He is Certified by the Supreme Court as a Workers’ Compensation Specialist.