How to Circumvent the Exclusive Remedy of the N.J. Workers’ Compensation Act

Is a willful disregard of O.S.H.A. standards sufficient?

The N.J. Supreme Court recently revisited the formidable burden of proof necessary for a plaintiff to circumvent the exclusive remedy of the Workers’ Compensation Act for a job related injury.  In a case decided on June 26, 2012, the Court held that plaintiff failed to meet his burden of proving his employer’s willful disregard of OSHA standards and other grossly negligent behavior caused his injury to a substantial certainty. An OSHA violation alone is not enough.

Although the proofs plaintiff advances could support a finding of gross negligence, that finding is insufficient to circumvent the statutory bar and maintain an action against plaintiff’s employer.”

The tragic story

In August 2004, when his workplace injuries occurred, Van Dunk was working for defendant James Construction Company, Inc. (“James”) as a union-provided “as-needed” laborer on a construction project at Giralda Farms in the Township of Chatham and Borough of Madison. Defendants Reckson Associates Company, Inc. and Reckson Construction, LLC (together “Reckson”) had contracted with James for James to perform site-preparation work. James, in turn, appointed Glenn Key as the project superintendent. Key also served as the OSHA-required on-site “competent person” for the project as of August 1, 2004.2

Prior to this workplace incident, Key had been an employee of James for thirty-two years and had experience as a previous project superintendent. For the Giralda Farms project, he reported directly to James’s president, J.D. Potash, and was responsible for planning and executing the construction work and for meeting budgets and deadlines.

On August 10, 2004, at the Giralda Farms construction site, James was excavating a trench to relocate a dewatering sump in a retention pond.  Prior to that date, the project had been plagued by thunderstorms and heavy rain that had required work to be redone, without additional compensation to James. Rain was expected again later that day; as a result, Potash and Key sought to complete the sump relocation before the rain arrived.

The sump relocation involved the following steps: digging a sloped trench; laying down first a filter fabric and then a layer of stone; placing a pipe on the stone; placing more stone on the sides and top of the pipe; and then wrapping additional filter fabric around the stone. As the trench excavation continued and its slope reached a depth of greater than five feet, Van Dunk and other workers began laying down the filter fabric from locations outside the trench. Eventually, the deepest part of the trench reached a depth of eighteen to twenty feet.

OSHA safety regulations mandate that workers cannot enter a trench that is deeper than five feet if protective systems are not in place.  29 C.F.R. § 1926.652(a).  A protective system is defined as “a method of protecting employees from cave-ins, from material that could fall or roll from an excavation face or into an excavation, or from the collapse of adjacent structures.”  29 C.F.R. § 1926.650(b).  James’s Safety Program similarly requires use of protective systems to guard against cave-ins.  Proper sloping and use of trench boxes are common protective systems, but for various reasons, Key determined that OSHA-compliant sloping could not be utilized at the trench’s location, and a trench box was not employed. Key and his workers experienced difficulty when laying down the filter fabric from their locations outside the trench. Despite their efforts, the fabric would not lay flat. It became tangled and a crease developed.

Van Dunk volunteered to go into the trench to straighten the filter fabric, but Key told him not to do so because of the possible risks attributable to the ground conditions. However, as problems persisted with laying the filter fabric, in what Key later described as a moment of “frustration” he told Van Dunk to go in and straighten the fabric. Van Dunk went into the trench, walked to the deeper end, and began adjusting the fabric. He was in the trench for less than five minutes when a loud noise was heard and a trench wall caved in, burying Van Dunk to his chest. He sustained multiple serious injuries.He was rescued by coworkers who immediately responded to help him, some of whom jumped in to dig him out, and by police and emergency personnel.

The landmark case of Millison v. E.I. du Pont de Nemours & Co.,101 N.J. 161 (1985)

Millison, supra, presented the Court with the question of whether employees who suffered asbestos-related diseases as a result of their industrial jobs were limited to recovery only under the Act or whether such employees came within the intentional-wrong exception, entitling them to pursue a separate tort action against their employer. Millison, supra, 101 N.J. at 165. 13. That said, the Court found the “deliberate intention to injure” standard to be too onerous and concluded that a more appropriate balance was struck through adoption of a “substantial certainty” standard.  Id. at 178.  The standard was delimited as follows:

[T]he mere knowledge and appreciation of a risk — something short of substantial certainty — is not intent. The defendant who acts in the belief or consciousness that the act is causing an appreciable risk of harm to another may be negligent, and if the risk is great the conduct may be characterized as reckless or wanton, but it is not an intentional wrong. [Id. at 177 (quoting Prosser and Keeton on Torts § 8 at 36 (5th ed. 1984)).]

The Court elaborated further on the newly established substantial-certainty standard, stating that it is not enough that “a known risk later blossoms into reality.”  Id. at 178. Rather, the standard “demand[s] a virtual certainty.”  Ibid.

Going forward, Millison, supra, instructed courts, when assessing claims of intentional wrong, to engage in a two-step analysis. First, a court considers the “conduct prong,” examining the employer’s conduct in the setting of the particular case.  Id. at 178-79. Second, a court analyzes the “context prong,” considering whether “the resulting injury or disease, and the circumstances in which it is inflicted on the worker, [may] fairly be viewed as a fact of life of industrial employment,” or whether it is “plainly beyond anything the legislature could have contemplated as entitling the employee to recover only under the Compensation Act.” Id. at 179.

Applying that test to the facts in Millison, supra, the Court held that the plaintiffs’ claim of intentional exposure to asbestos in the workplace failed to meet the substantial-certainty threshold because such hazards were considered within the risks the Legislature contemplated in passing the Act.  Ibid. However, the Court recognized the existence of a valid cause of action in respect of the plaintiffs’ second claim, that their medical conditions were aggravated by the defendants concealment of their illnesses. Id. at 181.  The Court noted a distinct and distinguishing “difference between . . . tolerating in the workplace conditions that will result in a certain number of injuries or illnesses . . . and . . . actively misleading the employees who have already fallen victim to those risks of the workplace.”  Id. at 182.

Millison, supra, remains the landmark case on the meaning of intentional wrong.

The Laidlow case

In Laidlow v. Hariton Machinery Co., 170 N.J. 602 (2002), the question was whether an employer who removed a safety mechanism from a dangerous piece of equipment, thereby deceiving safety inspectors regarding the use of appropriate safety mechanisms in the workplace, had committed an intentional wrong. Id. at 606.  We determined that where such conduct involving the intentional, and deceptively timed, engaging and disengaging of safety equipment led to the machine’s crushing of an employee’s hand, Millison’s, supra, conduct and context prongs both were satisfied. Id. at 606-07.

When considering whether the defendant’s conduct amounted to an intentional wrong, we reiterated the essential holding of Millison, supra.  We explained that, under Millison, supra, in order for an employer’s act to lose the cloak of immunity of N.J.S.A. 34:15-8, two conditions must be satisfied: (1) the employer must know that his actions are substantially certain to result in injury or death to the employee, and (2) the resulting injury and the circumstances of its infliction on the worker must be (a) more than a fact of life of industrial employment and (b) plainly beyond anything the Legislature intended the Workers’ Compensation Act to immunize. [Id. at 617.]

In determining that the conduct prong was met, we cited “the prior close-calls, the seriousness of any potential injury that could occur, Laidlow’s complaints about the absent guard, and the guilty knowledge of [defendant] as revealed by its deliberate and systematic deception of OSHA.”  Id. at 622. However, we declined to issue a per se rule that removal of safety devices or OSHA violations equate to intentional wrongs. Id. at 622-23.  Instead, they are factors to be considered, given the particular facts of the case; on the facts before us, we concluded that the plaintiff satisfied the context prong as well.  Id. at 622.  In that fact-sensitive conclusion, we stated that if an employee is injured when an employer deliberately removes a safety device from a dangerous machine to enhance profit or production, with substantial certainty that it will result in death or injury to a worker, and also deliberately and systematically deceives OSHA into believing that the machine is guarded, we are convinced that the Legislature would never consider such actions or injury to constitute simple facts of industrial life.

This Court has adhered to the legal principle articulated in Laidlow, supra, that a finding of an OSHA violation does not equate to an intentional wrong.

Key take-aways

• The trial court granted defendant’s summary judgment because the court concluded that plaintiff failed to show that defendants’ conduct met the intentional-wrong standard for overcoming the exclusivity of the workers’ compensation remedy.  See N.J.S.A.34:15-8.

• On appeal, the Appellate Division reversed, holding that plaintiff had produced sufficient evidence to show that defendants committed an intentional wrong, rendering plaintiff’s suit free of the Act’s exclusivity bar.  See Van Dunk, supra,415 N.J. Super. at 505.

• Recognizing that the case was “close,” id. at 503, the panel addressed the two-pronged analysis for an intentional wrong and noted, with respect to defendant’s conduct, that defendant had knowledge that allowing its employees to enter the trench without any safety device could lead to injury or death.

• Moreover, Key’s acknowledgment that there was an accumulation of water in the bottom of the trench, indicating that moisture was weeping from the soil, that there was cracking on the bank of the trench, coupled with his knowledge that Type C soil, the kind of soil he was working with, was the least stable, all show, in the totality of the circumstances, that he knew the trench was unstable and that it could fail.[Id. at 502-03.] Although not finding the OSHA violation conclusive, the panel stated that the motion court “did not give significant credit to the OSHA citation or the fact that defendant could have made the trench more stable if it had used protective devices.”  Id. At 504.  On the context prong of the analysis, which the panel recognized as presenting a purely legal question, the court took the view that “the Legislature would not have sanctioned the context within which this accident happened, or barred [plaintiff’s] recovery from James.”  Id.at 505.  Accordingly, the panel held that, upon examination of both prongs of the intentional-wrong analysis, the motion court had erred in granting summary judgment to defendants.  Ibid.

• N.J.S.A. 34:15-8 provides that [i]f an injury or death is compensable under this article, a person shall not be liable to anyone at common law or otherwise on account of such injury or death for any act or omission occurring while such person was in the same employ as the person injured or killed, except for intentional wrong.

• A finding of a willful OSHA violation is not conclusive in determining whether the employer committed an intentional wrong for the purposes of the Act. Instead, it is one factor among the totality of circumstances to be considered. In this case, the issuance of a willful OSHA violation against James was insufficient to defeat its motion for summary judgment, so the Court examines the totality of the circumstances of the accident and applies the conduct and context prongs of the substantial-certainty standard

• A probability or knowledge that injury or death could result is not sufficient to demonstrate an intentional wrong. Instead, an intentional wrong must amount to a virtual certainty that bodily injury or death will result. In this case, the on-site supervisor made a quick but extremely poor decision and, against his own better judgment, sent Van Dunk into a trench to perform a brief task and get out. The Court does not find an objectively reasonable basis to conclude that the violation of safety protocol was substantially certain to lead to injury or death during the few minutes Van Dunk was going to be in the trench. The Appellate Division’s totality of the circumstances analysis overvalued the finding of a willful OSHA violation and parlayed the possibility or probability of a cave-in into satisfaction of the substantial-certainty test. Because a likelihood of injury or death does not equate to a substantial certainty of injury or death, the conduct prong of the Millison, supra, test is not satisfied in this case.

• The context prong of the Millison, supra, analysis, which asks whether the injury and circumstances are beyond anything the Legislature could have contemplated as entitling the employee to recover only under the Act, is not satisfied here. The Court cannot conclude that the type of mistaken judgment by the employer and the ensuing accident were so far outside the bounds of industrial life as never to be contemplated for inclusion in the Act’s exclusivity bar.

• Although a reasonable fact-finder could determine that the employer’s actions in this case constituted gross negligence, that showing is not enough to overcome the Act’s exclusivity requirement. Neither the conduct prong nor the context prong of the Millison, supra, substantial-certainty test is satisfied. Accordingly, the Act’s exclusivity provision and specifically its statutory bar prevail to bar Van Dunk’s action against his employer.

Commentary

It is crystal clear to me there has to be a “virtual certainty” that an employer’s bad behavior will result in a significant injury to an employee before the N.J. Supreme Court will permit a common-law tort action against an employer. The N.J. Supreme Court even referred to “virtual certainty” when explaining what it meant by “substantial certainty.”Tough burden!

Does this mean victim’s lawyers should give up trying? Absolutely not! I am a proponent of the bad person toxic smell test. This means when you finish listening to your client’s story about the actions taken by her employer, if your face is contorted in anger from the toxic smell of the employer’s conduct-take a shot at firing a salvo at her employer’s workers’ compensation exclusive remedy immunity.

I must admit, when I read the facts in this recent N.J. Supreme Court case, my face was not contorted in anger; especially when Van Dunk volunteered to jump into the pit, and Keys refused his offer.

On the other hand, when the employer in Laidlow, supra, repeatedly removed the safety guard to fool O.S.H.A., and it was simply a matter of time before an employee became seriously injured because of this grotesque conduct, my face met the contorted in anger toxic smell test. Good facts make good law.

Bad people repeatedly doing bad things in total disregard for employee safety make the best defendants.

Read the full text of the N.J. Supreme Court opinion in Van Dunk v Reckson