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Applying New Jersey Law—Removal of Safety Guard from Machine Did Not Destroy the Applicability of Workers’ Compensation as the Exclusive Remedy

The First Department, over a two-justice dissent, reversed Supreme Court and dismissed a complaint alleging that a work-related injury was the result of an “intentional wrong” by the employer and, therefore, workers’ compensation was not the exclusive remedy.  The case required the application of New Jersey’s Workers’ Compensation Act, and the interpretation of the statutory term “intentional wrong” pursuant to New Jersey case law.  The injury to plaintiff’s fingers occurred on a machine from which a safety guard had been removed.  The First Department wrote:

…[I]n the present case there were no prior incidents or injuries caused by this machine; there is no evidence of deliberate deceit or fraudulent conduct on defendant’s part; and there were no OSHA violations issued to defendant prior to this incident. Although plaintiff testified that he requested on a number of occasions that the safety guard be replaced, he and other employees continued to use the machine without incident. Significantly, the accident would not have occurred absent plaintiff’s decision to retrieve a piece of stuck leather with his hand, rather than using a long-handled brush or long-handled screwdriver, which was the normal procedure to clear machine jams over the past 13 years that the machine had been in use. In fact, plaintiff testified at his deposition that he used such a long-handled screwdriver over the years to clear jams in the machine. … Thus, there is an insufficient basis for finding that defendant knew that its conduct in not replacing the safety screens was “substantially certain” to result in plaintiff’s injury …, or that there was a “virtual certainty” of injury … . The probability or knowledge that such injury “could” result, or even that an employer’s action was reckless or grossly negligent, is not enough… . Lebron v SML Veteran Leather, LLC, 2013 NY Slip Op 05664, 1st Dept 8-20-13

 

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Contract Between Town and Employer of Injured Employee Did Not Allow Indemnification of Town by Employer

In a Labor Law action seeking damages for a fall from the roof of a building under construction, the Fourth Department determined Supreme Court should have dismissed the town’s motion for contractual indemnification against plaintiff’s employer because the contract was not intended to be retroactive to the day of the injury.  The Fourth Department explained the applicable law as follows:

“Workers’ Compensation Law § 11 prohibits a third-party action against an employer unless the plaintiff sustained a grave injury or there is ‘a written contract entered into prior to the accident or occurrence by which the employer had expressly agreed to contribution or indemnification of the [third party plaintiff]’ ”… .  The Town concedes that plaintiff did not suffer a “grave injury,” and that it is entitled to indemnification only if it can demonstrate the existence of a written contract.  “When a party is under no legal duty to indemnify, a contract assuming that obligation must be strictly construed to avoid reading into it a duty which the parties did not intend to be assumed” … .  Meabon v Town of Poland…, 634, 4th Dept 7-19-13

 

Guidelines With Pre-Authorized Specific Procedure List for Medical Tests and Services Held Valid; Variance Procedure for Tests and Services Not on List Held Valid

In a full-fledged opinion by Justice Spain, the Third Department determined the Medical Treatment Guidelines created pursuant to Workers’ Compensation Law section 13-a (5) were valid and enforceable.  The Guidelines were adopted as the standard of care for all medical treatment for workplace injuries rendered on or after December 1, 2010, relating to injuries to the back, neck, shoulder and knee. The Guidelines include a preauthorized-specific-procedure-list for many common medical tests and services which do not require prior authorization. The regulations set forth a variance procedure in which treatment providers may request approval for medical care or testing that is not preapproved upon a showing that the treatment is appropriate and medically necessary.  In the case before the court, the denial of claimant’s request for a variance for acupuncture treatment was affirmed.  The dissenting justice argued there was “no support for the majority’s position that the [Guidelines] were intended to create a preordained and exhaustive list of medically necessary treatments, thereby rendering all non-listed treatments presumptively not medically necessary and creating a presumption that the employers/carriers could ‘rely on’ in fulfilling their statutory obligation to provide medical care to injured claimants.”  Matter of Kigin v State of New York Workers’ Compensation Board…, 515721, 3rd Dept 7-18-13

 

Employer Policy Re: Firing of Employees Injured in Preventable Accidents Was Discriminatory

The Third Department determined a policy which required probationary employees injured in a preventable accident to be fired, but did not require the firing of uninjured probationary employees who were observed working unsafely, improperly served to dissuade injured employees from seeking Workers’ Compensation:

Workers’ Compensation Law § 120 prohibits an employer from discriminating against  an  employee  because  that employee  either claimed or attempted  to claim workers’ compensation  benefits….  In enacting Workers’ Compensation Law § 120, the Legislature intended “to insure that a claimant [could] exercise his [or her] rights under the [Workers’] Compensation Law  . . . without fear that doing so [might] endanger the continuity of [his or her] employment… .

…[T]he policy …has a discernible impact upon probationary employees who are injured in work-related accidents, i.e., employees who  potentially could seek workers’ compensation  benefits.    The policy  effectively categorizes probationary employees into two groups: those who violate safety rules but are not injured, and those who violate safety rules and  are injured – with only the latter group automatically forfeiting their right to work  for the employer….   Such a policy dissuades those probationary employees who are injured in the course of their employment and wish to remain employed from reporting their injury and pursuing workers’ compensation benefits, which, in turn, runs counter to the Legislature’s intended purpose of insuring that employees  can exercise  their rights under  the  compensation  statutes  “without fear that doing  so may  endanger  the continuity of [their] employment”… .  Matter of Rodriguez v C& S Wholesale Grocers, Inc, 516124, 3rd Dept 7-3-13

 

Disability Pre-dated Work at World Trade Center—Worker Entitled to Workers’ Compensation

In reversing a decision of the Workers’ Compensation Board which ruled the employer was not entitled to reimbursement from the Special Disability Fund on the ground that the employee’s lung disease was solely related to work at the World Trade Center, the Third Department wrote:

[The treating doctor] repeatedly expressed  his  opinion  that claimant’s interstitial lung disease was  related to both his exposure at the WTC site and certain exposures throughout his career with the employer, which included exposure to asbestos. …Thus, although reimbursement pursuant to Workers’ Compensation Law § 15 (8) (d) may be denied when a work-related injury is the sole  cause  of  a  permanent  disability…, there is no medical evidence present here to support the Board’s conclusion that claimant’s disability was solely caused by his WTC  site exposure and, therefore, the Fund was inappropriately discharged… . Matter of Surianello, 515055, 3rd Dept 7-3-13

 

Benefits Awarded for Psychic Injury (Stress) Affirmed

The Third Department affirmed an award of Workers’ Compensation benefits based on psychic injury (stress).  Due an audit of the travel reimbursement policies of the employer, the employee (claimant) was required to pay taxes on “income” of $100,000 (the reason for the employee’s psychic injury).  The Third Department explained the analytical factors as follows:

A  workers’ compensation claim for psychic injury stemming  from work-related  stress is not  compensable  if it was “a direct consequence of a lawful personnel decision involving a disciplinary action, work evaluation, job transfer, demotion, or termination taken in good  faith by the employer”… .  Claimant, however, was not accused of wrongdoing by the employer.    Instead, her mental injuries stemmed from the serious financial liabilities she incurred as a result of a review of the employer’s reimbursement practices….[W]e  will not disturb the Board’s determination that the stress that claimant experienced was greater than that generally experienced by similarly situated workers in a normal work environment… .  Matter of Brittain v NYS Insurance Dept, 515279, 3rd Dept 6-27-13

 

Carrier’s Video Surveillance of Employee Disallowed Because It Was Not Disclosed

The Third Department affirmed the Workers’ Compensation Board’s determination that video surveillance of the employee was properly excluded from the hearing because the existence of the surveillance by the carrier had not been previously disclosed:

It is well established that an employer or carrier must disclose the existence of surveillance and investigation materials to a claimant prior to the claimant’s testimony … . This obligation serves “to  limit the gamesmanship which might otherwise occur”… . While routine questions …regarding claimant’s return to work may not trigger a carrier’s obligation to disclose the existence of these items…, we note that, here, the carrier specifically prompted this line of questioning …at the end of the hearing.  The surveillance materials were thus properly precluded, as the carrier had the opportunity to disclose their existence before prompting the [questioning] and before the claimant testified about returning to work… . Accordingly, contrary to the carrier’s argument, the Board’s decision to preclude the carrier’s surveillance materials did not deviate from its previous decisions and was  not arbitrary and capricious… .  Matter of Morelli, 515964, 3rd Dept, 6-13-13

 

Criteria for Recovery from Special Fund for Reopened Cases

In remitting the matter for further fact-finding, the Third Department explained the criteria for recovery from the Special Fund for Reopened Cases:

Workers’  Compensation  Law  §  25-a  provides  for the transfer of liability to the Special Fund  “when  an application to reopen a closed case is made  more  than seven years from the date of injury and  more  than three years after the last payment  of compensation…. Advance payments that are made voluntarily during the relevant time frame, in recognition of an employer’s liability, are considered compensation and  will prevent the shifting of liability to  the  Special Fund  ….   Notably, “evidence that a claimant received full wages  despite performing limited or light duties may result in a finding that advance payments [of compensation] have been  made”  …). Whether an advance payment of compensation was  made  to  the claimant is a factual issue for the  Board  to resolve and,  “its determination  . . . , if supported  by substantial evidence  in the  record  as  a  whole,  will not  be disturbed” … .  Matter of Schroeder v US Foodservice…, 515937, 3rd Dept, 6-6-13

 

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Defendant Did Not Demonstrate Plaintiff was Special Employee​

The Second Department determined the defendant did not demonstrate plaintiff was its special employee and therefore plaintiff was not restricted to Workers’ Compensation as his remedy:

In determining whether a special employment relationship exists, a court should consider factors such as the right to control the employee’s work, the method of payment, the furnishing of equipment, and the right to discharge…. “A significant and weighty factor . . . is who controls and directs the manner, details and ultimate result of the employee’s work'”….

Contrary to the determination of the Supreme Court, the defendant failed to come forward with sufficient evidence of a special employment relationship to demonstrate its prima facie entitlement to judgment as a matter of law, since its submissions on the motion did not establish, inter alia, that it controlled and directed the manner, details, and ultimate result of the plaintiff’s work… . Nolan v Irwin Contr, Inc, 2013 NY Slip Op 03648, 2nd Dept, 5-22-13

 

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Defendant Was Not Plaintiff’s “Special Employer”

In finding defendant was not plaintiff’s (Vasquez’) “special employer” (and therefore could not take advantage of the exclusive-remedy provision of the Workers’ Compensation Law), the First Department wrote:

Defendant’s motion for summary judgment, made on the ground that the complaint is barred by the exclusivity provision of the Workers’ Compensation Law (see Workers’ Compensation Law § § 11, 29[6] …, was properly denied. Defendant maintains that it was Vasquez’s special employer because it hired all building employees, including Vasquez, and was also responsible for firing. However, plaintiff asserts the evidence establishes that defendant was not Vasquez’s special employer. Specifically, the property owner, not defendant, paid and provided benefits to Vasquez. Defendant’s evidence failed to establish as a matter of law that it “control[led] and direct[ed] the manner, details and ultimate result of” Vasquez’s work …, and plaintiff acknowledges questions of fact exist on this issue. If the issue of defendant’s status as a special employer is resolved in plaintiff’s favor, plaintiff is entitled to partial summary judgment on liability on her Labor Law § 240(1) claim. Vasquez v Cohen Bros Realty Corp, 2013 NY Slip Op 02682, 1st Dept, 4-23-13​

 

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