An employee can not sue his employer in civil court for bodily injuries – he can only collect workers’ comp benefits. While this exposes employers to the costs associated with medical treatment, temporary disability wage compensation benefits, and permanency benefits, this is far less expense then if employees were able to collect money judgments in civil court for their injuries (well, that is the theory justifying our compulsory system of workers’ compensation, anyway).
What this means is that in many situations, particularly those where there may be dual employment, potential litigation targets bend over backwards to prove that they are, indeed, an employer and therefore responsible only for their portion of workers’ compensation costs – and not liable in superior court for a civil judgment. In fact, much of the case law in New Jersey on the topic of “co-employment” or “dual employment” has been generated by targets of litigation fighting to show that they were, in fact, the employer of the injured party and therefore entitled to the “workers’ comp bar” (the immunity from civil suit afforded an employer is commonly referred to as the “comp bar.”)
In a recent case, the decedent was the superintendent at an apartment building. One business entity, “Lincoln Avenue Corp” provided free rent to the claimant, who was required to live ‘on the premises.’ Another business entity, “TR Mudnick” actually paid the employee his salary.
While these two entities had different names, the two entities shared the same corporate officers, both paid the claimant wages, and being the same entity, each had control over the way he carried out his duties. In so ruling, the Court found that ‘free rent’ was akin to paying wages.
The result of this ruling – finding that both ‘Lincoln Avenue Corp’ and ‘TR Mudnick’ were employers – meant that the claimant’s only recourse against those employers was his workers’ compensation claim.
This ruling is an important one for employers in similar situations, and employers who (for example) have one company that “operates” a facility and another that “owns the property” that the facility occupies. In cases where the owner of the property – even if that is the same as the ‘actual’ owners of the operating entity – may be exposed for civil claims from their employees.
Case: Montalvo v. Lincoln Avenue Corporation and City of Newark, A-0904-08T3 (App. Div., decided October 30, 2009).