Dual Employment Status Bars Double Recovery

An employee may have dual employers but ultimately can only receive a single recovery from only one employer for work-related injuries. The “exclusivity doctrine,” permitting a complete recovery of damages against an employer, limits an injured worker’s benefit recovery to the compensation system, barring an intentional tort. 

A worker was hired by a general staffing agency, New York Mutual, Inc. [NYM], and assigned to work at an NJ warehouse in Secaucus loading and unloading container trucks for Mutual Trading, Inc. [Mutual]. The warehouse was rented in a triple net lease from another company, Hartz Metro Fee II, LLC [Hartz]. 

The terms of employment were that the staffing agency used the timecards on NYM to invoice NYM for services and paid the employee. HARTZ assigned the daily work to the worker and supervised his work and a right to discharge the employee. 

In August 2016, the worker slipped and fell on a pre-manufactured six-and-a-half-foot metal ramp that descended from the loading dock. The ramp area was poorly lit and slippery, had no handrails and lacked a non-slip surface. Serious injuries occurred, including a fractured right humerus and torn rotator cuff that required surgical intervention. 

“When an employee may appear to work for two employers simultaneously, critical issues are presented as to which employer is responsible for the payment of workers' compensation benefits and whether either or both employers have the benefits of the “exclusivity doctrine” available to defend against a third-party action. An employee may be considered to have two employers simultaneously for workers' compensation purposes.” 38 N.J. Prac., Gelman, Jon L., Workers' Compensation Law § 7.7 (3d ed.) (Thomson-Reuters 2022). 

A New Jersey appellate court barred recovery in a negligence action against NYM, reasoned that the injured worker was not a “special employee” and, therefore, the exclusivity doctrine could not be circumvented. Relying upon the well-established law of a trilogy of cases, a common law action for negligence could not be brought against NYM. The employee may have dual employers and, in this case, both the staffing agency and NYM. 

The court's rationale was that the employee is barred from bringing a workers’ compensation action against the staffing agency and NYM. Kelly v. Geriatric & Med. Servs., Inc., 287 N.J. Super. 567 (App. Div. 996) (fact-sensitive five-pronged test for special employer status); Walrond v. Cty. Of Somerset, 382 N.J. Super 227 (App. Div. 2006), not all five prongs need to be satisfied); Antheunisse v. Tiffany & Co., Inc. 229 N.J. Super (App. Div. 1988), recovery of workers’ compensation bars a civil action against the other.

The court also declined to permit an intentional tort action against HARTZ as the fact did not rise to be sufficiently flagrant to constitute an intentional wrong. Additionally, the HARTZ lease transferred the responsibility for the ramp maintenance to the leasee, NYM, which then barred a negligence action against HARTZ.

The special employee doctrine cannot be invoked to circumvent the prohibition of a duplicate claim.

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