Theezan v. Allendale Cmty. for Senior Living, Docket No. A-1650-17T2, 2019 N.J. Super. Unpub. LEXIS 890 (App. Div., Decided Apr. 16, 2019)

“Special employees” have limited remedies under the NJ WC Act.

The plaintiff worked as a housekeeper for the defendant. Her responsibilities included cleaning residents’ rooms, dusting, mopping and making beds. In or about 2015, the management of Allendale’s housekeeping staff, including hiring, firing and compensation, was outsourced to Health Services Leasing Group (HCSG), for which Allendale paid a monthly service fee. Under the terms of their agreement, Allendale and HCSG “share[d] the right of direction and control” over the housekeeping staff. Allendale “retain[ed] sufficient direction and control” over the housekeeping staff “without which [Allendale] would be unable to conduct its business.” That notwithstanding, HCSG retained “sufficient authority as to maintain a nonexclusive right of direction and control” with respect to the housekeeping staff, including a “right to hire, discipline, demote, promote, compensate, terminate, layoff or otherwise discharge or reassign” any of the housekeeping staff. The agreement further provided that the housekeeping staff “shall be considered employees of [Allendale] and [HCSG]” for purposes of the agreement. An on-site HCSG supervisor oversaw the housekeeping staff. Although Allendale did not evaluate the day-to-day performance of the housekeeping staff, it could request that housekeeping staff address issues such as cleaning or taking out the garbage, if necessary, and if dissatisfied, Allendale could request that HCSG replace certain housekeeping staff.

On March 14, 2016, the plaintiff fell in an office she was cleaning, sustaining an injury to her arm and shoulder. She subsequently filed a workers’ compensation claim against HCSG and sued Allendale in tort for her injuries.

At the conclusion of discovery, the Allendale filed a motion for summary judgment based on the Workers’ Compensation Act’s so-called “exclusivity provision,” N.J.S.A. 34:15-8, which provides, in relevant part, that “if any injury ... is compensable under the Act ... a person shall not be liable to anyone at common law or otherwise on account of such injury.” The Workers’ Compensation Act covers all work-related injury claims brought by an employee against her or her employer. N.J.S.A. 34:15-8. An employee is broadly defined as one “who perform[s] service for an employer for financial consideration[.]” N.J.S.A. 34:15-36. Under Antheunisse v. Tiffany & Co., Inc., 229 N.J. Super. 399 (App. Div. 1988), an employee can have both a general and a “special” employer. See also, Hanisko v. Billy Casper Golf Mgmt., Inc., 437 N.J. Super. 349 (App. Div. 2014). Recovery against one employer bars the employee from maintaining a tort action against the other for the same injury. As the plaintiff was a “special employee” at the time of her injuries, the defendant argued, she was limited to those remedies provided under the Workers’ Compensation Act. The trial judge agreed and granted the defendant’s summary judgment motion. This appeal followed.

In affirming the lower court’s granting of summary judgment, the Appellate Division relied on Kelly v. Geriatric & Med. Servs., Inc., 287 N.J. Super 567 (App. Div. 1996). In Kelly, the court established a five-part test to be used in assessing whether a special employment relationship exists: (1) the employee has made a contract of hire, express or implied, with the special employer; (2) the work being done by the employee is essentially that of the special employer; (3) the special employer has the right to control the details of the work; (4) the special employer pays the employee’s wages; and (5) the special employer has the power to hire, discharge or recall the employee. Although no single factor is dispositive, the Kelly court held that the most significant factor is the element of control.

The Appellate Division further held that factors four and five were also satisfied as Allendale paid a monthly service fee to HCSG consistent with indirect compensation for the plaintiff’s services, and Allendale’s on-site supervisor, who could request that any employee be transferred to a new location, had the functional equivalent of the power to discharge. As such, the Appellate Division concurred with the trial court’s finding that the plaintiff was a “special employee” of Allendale at the time of her injuries and, as such, was barred from bringing a tort action against Allendale.


Case Law Alerts, 3rd Quarter, July 2019

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