Policy

Justin Wild, a licensed funeral director, was diagnosed in
2015 with cancer and was prescribed marijuana under the New Jersey
Compassionate Use Medical Marijuana Act.

In May 2016 Wild was working a funeral when his vehicle was
struck by another vehicle that ran a stop sign. 
Wild advised a treating doctor at the hospital that he had a license to
possess medical marijuana.  The doctor concluded
it was clear that Wild was not under the influence of marijuana and therefore
he would not need to be tested to return to work.

Wild returned to work, but several days later Wild was told
that the company was unable to “handle” his marijuana use and that he was
“being terminated because they found drugs in your system.” The company wrote
Wild a letter stating that he had been terminated not because of his drug use
but because he failed to disclose his use of medication that might adversely
affect his ability to perform job duties. Plaintiff’s mother later heard a
rumor going around that Wild was fired because he was “a drug addict.”

Wild sued his employer, Carriage Funeral Holdings, Inc.,
alleging that his employer discriminated against him based on disability due to
his use of medical marijuana off site.  His
employer tried to stop the law suit in its tracks by moving to dismiss the case
for failure to state a claim upon which relief can be granted.  The employer argued that the Compassionate
Use Act does not contain employment –related protections, relying on language
in the Compassionate Use Act that states, “nothing
in this Act shall be construed to require … an employer to accommodate the
medical use of marijuana in any workplace.”

Wild countered that this language does not mean that the LAD
may not impose its own obligations on the employer.  Wild said he was not seeking an accommodation
to use marijuana in the workplace, only an accommodation that would allow his
continued use of medical marijuana off-site and off work hours.

Wild lost at trial but obtained a reversal in the Appellate Division.  On March 10, 2020, the New Jersey Supreme Court affirmed the decision of the Appellate Division, allowing Wild to proceed with his case. The Court held that there is no conflict between the Law Against Discrimination and the Compassionate Use Act. It said, “The Compassionate Use Act does have an impact on plaintiff’s existing employment rights.  In a case such as this, in which plaintiff alleges that the Compassionate Use Act authorized his use of medical marijuana outside the workplace, the Act’s provisions may be harmonized with the law governing LAD disability discrimination claims.”

This is the first case in which the New Jersey Supreme Court has addressed the right of an individual who uses medical marijuana to pursue employment litigation for termination of employment due to use of medication outside the workplace. While this case did not arise out of workers’ compensation, the case is instructive to practitioners because there are many injured workers using medical marijuana in New Jersey.  This is one of the first decisions on the state’s Compassionate Use Medical Marijuana Act.

The post New Jersey Supreme Court Permits Plaintiff To Proceed With His LAD Law Suit Alleging He Was Wrongfully Terminated For Legal Use of Marijuana Under The Compassionate Use Act appeared first on NJ Workers' Comp Blog.

A cardinal rule in workers’ compensation is that an employee cannot sue his or her employer in civil court for a work injury except for rare circumstances involving intentional harm.   But what if the employee has two employers?  Does that rule apply to both employers?  The answer is yes, the rule applies to both employers, so the focus in many cases is on whether there really is an employer relationship to begin with.  The case of Carabello v. Jackson Dawson Communications, Inc. and Transcend Creative Group, LLC, A-3294-17T3 (App. Div. March 26, 2019) provides some helpful insight on the requirements to establish “the second employer.”

Mr. Carabello worked for the New Jersey Sports and
Exposition Authority as a teamster truck driver. The NJSEA contracted with
Transcend and Jackson Dawson for a Mercedes Benz event at the Izod Center which
the NJSEA owned.  Carabello was the only
forklift operator at the Izod Center during the event.  NJSEA assigned him to operate the forklift to
unload the trucks of Transcend and Jackson Dawson Communications.  Carabello was told to report to Jackson’s head
man for further instructions in securing the tent structure for Transcend and
Jackson. 

The head man for Jackson instructed Carabello to transport
barrels filled with water using the forklift. 
Carabello proposed that it might be wiser to transport the barrels while
they were empty but that suggestion was not followed.  While loading the filled barrels on the
forklift, two barrels fell off.  As
Carabello moved the last of sixteen barrels off the forklift, he felt a pop in
his shoulder.  His injury was promptly
reported to the NJSEA, and the NJSEA paid workers’ compensation benefits.

Carabello then attempted to sue Transcend and Jackson Dawson
for negligence in a third party action. 
Jackson and Transcend argued in essence that Carabello could not bring a
civil suit against them because he was their “special employee.”  The trial judge agreed and barred the civil
suit, leading to an appeal by Carabello. 
In his appeal, Carabello argued that the five-pronged test of a special
employee did not apply to his situation.

First, he argued that there was no express contract between
Carabello and Transcend and Jackson. 
Second, he argued that he was doing the work of the NJSEA.  It was on NJSEA property.   The Appellate Division agreed with Carabello
on both of these points.

Next, Carabello argued that his work was not controlled by
Jackson and Transcend.  The Appellate
Division said this point was unclear. 
NJSEA told Carabello to use the forklift to help the exhibitors set up
the event.  Jackson and Transcend told
him to move the filled water barrels to help secure their tent.  On balance, the Court felt that NJSEA really
controlled the work.  “Plaintiff testified the scope of his
employment for NJSEA included helping production personnel with event setup,
which involved operating the forklift and assisting others during the
production process.”

Fourth, Carabello argued that he was paid by NJSEA.  The Court noted that Transcend and Jackson
paid a fee for operation of the forklift, but they did not pay Carabello’s
salary. 

Lastly, Carabello argued that he could not be fired by any
entity other than the NJSEA.  The Court
agreed that the license to produce the exhibition at the Izod center did not
provide Jackson and Transcend with the authority to hire or fire
Carabello. 

For these reasons, the Appellate Division reversed and allowed Carabello to sue Jackson and Transcend in a civil suit for their alleged negligence in contributing to his shoulder injury.  One key distinction between this case and other special employee cases involving assigned nurses is that Carabello was working on NJSEA property when he was injured.  In many of the nursing cases where special employment status is found, the nurses work on hospital property under direct control of the hospital.

Thanks to Rick Rubenstein, Esq. for bringing this case to our attention.

The post NJSEA Teamster Truck Driver Found Not To Be Special Employee Of Exhibitors At Izod Center appeared first on NJ Workers' Comp Blog.

By:  Alfred Vitarelli, Esq., Shareholder, Stark & Stark

Ask any practitioner about the nature of Medicare and his or her response will usually be that it is a source of medical coverage for the very poor, such as those receiving SSI (Supplemental Security Income.) Alas, such an answer is no longer correct, nor is it safe. Why? Well, as in the case of ERISA liens, (Ah ha! Now you know where you’ve seen my name before!) we are again dealing with the dreaded “F” word. No, not that “F” word, the one which resulted in Ralphie enjoying the subtle flavor of Lifebuoy (remember, “A Christmas Story?”).  No, once again we have a federal Act, establishing both the benefit and the requirement of recovery of any claims paid for which a third-party source is legally liable. The (somewhat) good news is, however, that the recovery mechanisms (liens) are administered by the states. More on this later.

Medicaid was established by federal law, 42 U.S.C 1396 et. seq. (the Act.)  The intent of this Act was to provide medical coverage for people unable to afford their own coverage. Like other federally-established health coverage such as Medicare and Veterans Administration benefits, Medicaid (and as the title indicates, NJ Family Care – hereinafter NJFC) is intended to pay health care costs for illnesses, injuries, etc., where no other coverage is legally obligated to pay. In other words, they are “payors of last resort.” This is seen in N.J.A.C. 10:49-7.3(1)(b), “Medicaid and NJFC program benefits are last-payment benefits. All [third party liability medical benefits]…shall, if available, be used first and to the fullest extent in meeting the cost of the medical needs of the Medicaid or NJ Family Care beneficiary…”

While established by federal law, Medicaid & NJFC are state-funded and administered. Additionally, and most important to the purpose of this article, the Act contains a requirement that the states establish a mechanism to pursue the recovery of any payments made by Medicaid/NJFC for which a third-party source should be legally liable. These sources include, but are not limited to, workers’ compensation coverage and casualty insurance in tort recoveries. In New Jersey, recovery of improper payments is contracted to HMS.

In addition to recovery efforts by HMS, a provision in N.J.S.A. 30:4D-7.1(b) states “…every recipient or his legal representative shall promptly notify the division (Division of Medical Assistance and Health Services) of any recovery from a third party and shall immediately reimburse the division in full from the proceeds of any settlement, judgement, or other recovery in any action or claim initiated against any such third party…” Clearly, this places a duty to report such recoveries on the injured party’s attorney. However, respondents take note. The Statute on the Code speak of recovery from a third party. And, in Hedgebeth v. Medford, 74 N.J. 360, (1977) our State Supreme Court stated that New Jersey’s Medicaid law evidences an “…unmistakable intent to afford the State every opportunity to recoup its payments from third parties.” Thus, both petitioners and respondents have an interest in the outcome of petitions involving such liens. In the event that a petitioner fails to give notice where Medicaid/Family Care clearly provided treatment, a respondent could likely give notice or file a motion to compel petitioner to give notice.

OK, so with the legal background established, what should a claimant’s attorney do to protect his/her client, him/herself, and honor the law? Well, this process begins with the initial interview with a new client. No attorney should assume that a client has medical coverage through an employer; Medicaid is increasingly the coverage for many people, even those who work for employers which provide excellent coverage. Traditionally, Medicaid/NJFC covered people who were very poor, disabled or both. Now, however, more and more people are covered by Medicaid and NJFC. As a practitioner I have personally observed that more and more people no longer have coverage offered by their employers; in many such situations they can no longer afford the employee’s portion of the premium. And so, they are now covered by N.J. Family Care, a “payor of last resort.”

Accordingly, at this first meeting with a new client the workers’ compensation attorney must ask whether the client is covered by Medicaid/NJFC. If so, notice must be immediately given to HMS of the claim in question. This has always been done by mail; however, HMS now has a Web-Portal for submission of the necessary documents. The mailing address/portal information can be obtained on the HMS website for New Jersey Medicaid. (Sorry, this article is to raise awareness of these issues; I won’t do your work for you!) Once that is done, HMS will send the attorney a set of questions to be answered concerning the happening of the accident, is it workers’ compensation or tort, what body parts were involved, etc. These questions are designed to allow HMS to determine what payments, if any, have been made for which a third party is legally liable. HMS will then send the attorney an initial Statement of Aid Paid, if in fact payments were made. Later, after a settlement has been agreed to but PRIOR to seeking approval of the settlement by a Judge of Workers’ Compensation, the petitioner’s attorney MUST provide HMS a copy of the proposed Order Approving Settlement or Section 20 Order, inclusive of fees and costs. Thereafter, HMS will issue a Final Statement of Aid Paid.  In my experience, (fortunately, to date observing others,) delayed responses from HMS are frequently caused by incomplete/incorrect submission of documents.

OK, so now I’ve discussed the origin of these state-funded plans; what they pay for and, most importantly, what they DON’T pay for; law and mechanisms for recovering payments; and, how to provide proper documentation to HMS. Now, all of you are thinking, I will tell you what guidelines exist for negotiating these liens, the power of workers’ compensation judges to deal with them, etc., etc., all the things to make your lives easier, right? Well, time to cue the occasional chirping of crickets; no other sound to break the silence. Right, you guessed it, I’ve been unable to find any guidelines, code provisions, case law, etc. to smooth the process of closing workers’ compensation cases with HMS liens. Nothing. Nor have I spoken to anyone who has found such guidance. Of course, if the liens contain payments for treatment clearly unrelated to the work-related injury, write to HMS and ask them to please remove them. Still, I and many others believe there should be some guidance in this area.

So, what is the answer? Well, I have a definite idea as to what should be done. I may be told it’s unrealistic, that it is an area in which I have no business treading, I may even upset some people. But, as that increasingly popular little creature says, “Honey Badger don’t care.” (No, don’t ask. I won’t tell!)

Several years ago there were questions as to the proper method to close a workers’ compensation case where the Petitioner was in receipt of an Accidental Disability Pension. High ranking representatives of the Division of Workers’ Compensation met with similar representatives from the Division of Pensions to work out the issues, resulting in a Memo from former Director/Chief Judge Calderone outlining the accepted methods of closing such claims.

I believe similar actions need to be taken here. However, considering the fact we are dealing with benefits created under federal law, and considering the large sums of money which are the subject of HMS liens, I suggest that the Department of Labor and HMS should attempt to work this out. Obviously, the Division of Workers’ Compensation will provide more than significant input. May I also suggest (ok Al, now you are really going out on a limb) that the Commissioner’s Advisory Committee on Workers’ Compensation be reconstituted to provide valuable input here, and in other issues affecting the practice of Workers’ Compensation. Just a thought.

(Editor’s Note:  Many thanks for Attorney Al Vitarelli for educating us all on Medicaid liens.  This is an increasingly important part of the NJ workers’ comp practice.)

The post Medicaid And New Jersey Family Care Liens: State Funded Medical Benefit Programs Cover Increasing Numbers of New Jersey Citizens appeared first on NJ Workers' Comp Blog.

As practitioners well know, many ADA law suits begin with a workers’ compensation injury.  But where is the line between an issue that must be handled in workers’ compensation and one that can be brought in civil court?  That was the issue that the New Jersey Supreme Court decided on March 25, 2019 in Caraballo v. City of Jersey City Police Department (A-71-17) (080467).

Caraballo joined the Jersey City Police Department (hereinafter JCPD) as a police officer in February 1973.  He injured his hands, back, and legs in August 1999 during a motor vehicle accident and filed a workers’ compensation claim.  He underwent anterior cruciate ligament reconstruction surgery on his left knee.

Two city-appointed physicians gave opinions that Caraballo would eventually need bilateral knee replacement surgery.  Caraballo’s workers’ compensation attorney contacted defense counsel for JCPD in 2008 and requested approval for the knee replacement surgery. Caraballo’s attorney also requested a specific physician to perform the surgery, noting that Risk Management had approved that physician.

Surgery did not take place for reasons that are not clear in the opinion.  In August 2010, Caraballo put in his retirement papers with the New Jersey Division of Pensions and Benefits effective March 1, 2011. Lieutenant John McLellan of the JCPD Medical Bureau was of the impression that Caraballo did not  intend to pursue the surgery.  McLellan also noted that Caraballo refused to see a certain doctor “who would be able to determine unequivocally whether or not he should have the surgery.”

Caraballo retired on March 1, 2011.  Thereafter Risk Management authorized an orthopedic surgeon to evaluate Caraballo for bilateral knee replacement surgery.  The doctor told Caraballo to contact the office to pick a date for surgery pending medical and cardiac clearance.  However, Caraballo never called the doctor’s office to schedule a date for surgery.

On March 4, 2013, Caraballo finally settled his workers’ compensation claim.  A short time later, he brought a civil suit alleging that the City violated his rights under the New Jersey Law Against Discrimination for failing to authorized the knee replacement surgery and failing to make reasonable accommodations to his disability.

The trial court ruled against Caraballo because he failed to enforce his rights to have knee surgery in workers’ compensation court.  Apparently, he never filed a motion for medical and temporary disability benefits. The Appellate Division reversed in favor of Caraballo.  The Appellate Division observed that Caraballo may have been able to perform the essential functions of his job had he obtained a reasonable accommodation of knee surgery.

The New Jersey Supreme Court accepted certification and reversed the Appellate Division.  The Court relied on prior case law to the effect that an employee must first exhaust all administrative remedies under workers’ compensation before seeking enforcement in the Law Division.  The Court said:

Here, Caraballo filed his workers’ compensation claim in 2001, retired in 2011, and settled his claim with the JCPD in 2013.  In the interim, Caraballo contacted Risk Management several times to obtain authorization for double knee replacement surgery but never sought to enforce his right to the surgery in the workers’ compensation court.  Caraballo’s failure to utilize the Act’s administrative remedies to obtain knee replacement surgery precludes his failure-to-accommodate claim under the LAD.

The court next went on to consider whether surgery can be considered a reasonable accommodation in New Jersey. The court first cited to the language in the LAD and ADA for specific examples of reasonable accommodation:  (i) making facilities used by employees readily accessible and usable by people with disabilities; (ii) job restructuring, part-time or modified work schedules or leaves of absence; (iii) acquisition or modification of equipment or devices; and (iv) job reassignment and other similar actions.

The Court observed that no New Jersey case prior to Caraballo had ever addressed the question of whether medical treatment qualifies as a reasonable accommodation under the LAD.  A case in Connecticut was instructive to the Court, Desmond v. Yale-New Haven Hosp., Inc., 738 F. Supp. 2d 331, 350 (D. Conn. 2010).  In that case the Connecticut District Court ruled against a workers’ compensation plaintiff who argued that in order to continue working she would need medical treatment, including pain management and physical therapy.  The Connecticut Court held that a reasonable accommodation must relate to workplace barriers.  There was no responsibility under the ADA or state civil rights law to make sure an injured employee is receiving appropriate medical treatment.

The New Jersey Supreme Court agreed with the ruling in Desmond:

The medical procedure sought by Caraballo – his double knee replacement surgery – is neither a modification to the work environment nor a removal of workplace barriers.  Rather, it is a means to treat or mitigate the effects of his injuries, like the treatments at issue in Desmond.  We therefore find it consistent with the LAD, the ADA, and their regulations that Caraballo’s total knee replacement surgery cannot qualify as a reasonable accommodation under the LAD.

This case is truly significant for practitioners, carriers, third party administrators and workers’ compensation professionals.  Had the ruling gone the other way, employees would have been able to pursue civil action against employers for potential denial of benefits in workers’ compensation. The Court is undoubtedly correct that this would violate the basic rule that workers’ compensation is the exclusive remedy for injured workers regarding medical benefits.

Thanks to Rick Rubenstein, Esq. for bringing this case to our attention.

The post Employee’s Failure to Pursue Rights in Workers’ Compensation Court Precludes a Civil Suit for Failure to Accommodate under the ADA and LAD appeared first on NJ Workers' Comp Blog.

By:  Alfred Vitarelli, Esq., Shareholder, Stark & Stark

If the workers’ compensation practitioner reading this otherwise dry blog finds his/her mind wandering to more exciting topics, let your mind focus on that ominous line from the 1987 classic “Fatal Attraction:” I will NOT be IGNORED!”

No, I am not comparing the great acting of Glenn Close to ERISA. I am, however, making the important point that like Close’s character, ERISA must never be ignored.

I’ll begin discussing ERISA liens by presenting a scenario played out with distressing frequency in New Jersey workers’ compensation courts. Petitioner’s attorney informs the Judge that a private disability plan (the plan) has provided treatment in the denied claim presently before the Court. An agreement has been reached with Respondent to settle the claim on a Section 20 dismissal. However, the plan has asserted a substantial lien for payments made on behalf of the petitioner. To make matters worse, the plan has not to date provided detailed billing records, medical documentation, etc., which the parties hope will allow the reduction of the amount of the lien, and this is delaying the settlement. Accordingly, petitioner’s attorney will be filing a motion requesting the court to rule out the lien if the plan does not appear on the return date of the motion.

See any problems with the above scenario? Well, yes. And yes.

First yes:  based on the facts given above there has been no consideration as to the status of the plan lien; since this is a discussion of ERISA, the parties are unaware if the plan is covered by ERISA. And why is this important? Because ERISA plans are created by federal law, and thus are subject only to federal jurisdiction. That’s why.

Second yes: because any order entered against an ERISA plan by a state court judge is ultra vires (meaning, acting beyond one’s legal power). Since ERISA plans are only subject to federal jurisdiction, they can ignore any such order as discussed above and sue in federal court to recover the amount of its lien. That’s why #2.

Ok, let’s get down to a serious discussion of ERISA. (Actually, I think this has been serious all along, but I’m sure there are those who will disagree).

Exactly what is ERISA? The Employment Retirement Income Security Act of 1974, ERISA, is a federal law which sets minimum standards for most voluntarily established pension, health and disability plans in private industry. ERISA allows an employer to establish self-funded plans. These plans are employee benefits which pay claims through either the assets of the employer or through a trust which is funded by contributions from the employer and employees. An ERISA health plan differs from a traditional health insurance policy which is purchased through premiums to provide coverage. ERISA expressly pre-empts “any and all state laws insofar as they may now or hereafter relate to any employee benefit plan.”

So, having said that, who or what entities are covered by ERISA? ERISA applies to private industry. In general, ERISA does not cover group health plans established or maintained by government entities, churches for their employees, or plans which are maintained solely to comply with workers’ compensation, unemployment or disability laws. A prime example of what plans are covered by ERISA are those provided to employees pursuant to a collective bargaining agreement between a labor union and an employer. These plans are funded either entirely by the employer or by contributions from the employees as called for by the employer/union agreement.

Ok, now we know what an ERISA plan is, and (hopefully) understand the necessity of directly addressing liens asserted by these plans. So how can an attorney faced with a private plan lien determine if the plan is covered by ERISA?  This can’t be determined by just looking at the client’s benefit card; they don’t say “This plan is covered by ERISA.”  When the status of a lien is in doubt the best way is to request from the Plan Administrator the Summary Plan Description, IRS Form 5500. The Administrator is required to furnish a copy of the latest updated plan documents, including the Master Plan Document. These should be reviewed carefully, since an ERISA plan must clearly state the existence of a right to recovery. NOTE: Never assume that because the lien is asserted by a “traditional” insurance carrier such as Aetna, Cigna, BlueCross/Blue Shield, etc., that the plan is paid by premiums and is therefore not a private benefit plan covered by ERISA. Such insurance carriers do act as TPAs for ERISA plans. When in doubt ask for the IRS form 5500. Another method to obtain the form 5500 is to register online at www.freeerisa.com. I have not used this yet, but some attorneys find this a very convenient method to obtain this information.

Federal Jurisdiction – what are the implications if a lien is not honored?

Earlier in this blog it was noted that ERISA plans are only subject to federal jurisdiction; the doctrine of federal preemption applies as well. If an ERISA lien is not honored when asserted in a workers’ compensation case the plan provider may file an action in federal court to enforce its right of subrogation as contained in the plan. This is authorized by Section 502(a)(3) creating an equitable form of relief in the recovery of payments. This equitable right of recovery was most famously recognized by the U.S. Supreme Court case of US Airways Inc. v. McCutchen, 133 S. Ct.1537 (2013). Here, the Court held that an equitable lien is created by the language of an ERISA Plan, and the language of the Plan controls absolutely, even to the exclusion of common-law principles of unjust enrichment, the make-whole doctrine and the common-fund rule.

Please note carefully, however, that McCutchen holds the language of the Plan controls. While most practitioners will be aware of the McCutchen decision, fewer know the ultimate outcome of the litigation. After the Supreme Court rendered its decision, it remanded the case to the lower court to review the language of the Plan documents. Surprise, surprise! It turns out that the attorneys in the case did not review the Plan documents before the Supreme Court remand. The lower court found that while the Summary Plan Description supported the recovery of the full lien, the Master Plan Document did not. As a result, US Airways was only entitled to a recovery on a small portion of the overall settlement below. ALWAYS READ THE DOCUMENTS!

The above points should make it clear that in ANY situation where a petitioner received unauthorized treatment through a private benefit plan his/her attorney must be aware as early as possible in the litigation whether the plan is covered by ERISA. There are too many pitfalls which may be encountered by ignoring the status of these Plans (including recovery of the lien by attaching attorney fees.) Of course, non-ERISA plan liens must also be addressed, but they at least may be covered by state laws on subrogation, something outside the topic of this blog.

Before ending, I feel it necessary to discuss the potential role of the respondent attorney in these situations. I can hear most of you already: ”what role? there is none…petitioner’s problem….not my fees that can be attached…that lien is just a darn nuisance, my role is to make it go away so I can close the file.” OK, so maybe that last comment was a stretch, but the others are heard…and wrong. Remember the definition of an ERISA plan? How it is funded? Entirely by employer or by employer and employees? Right, now you get it. Employer = Respondent (in many if not most cases.)

So, having also been a respondent attorney for many years, I feel that the employer should always be consulted in ERISA lien situations before settlement discussions begin considering the financial implications of the Plan paying for possibly work-related treatment. I have definite ideas about what approaches to take, but I’ll leave it to others to fill in the blanks.

Please keep in mind that both this blog and the study of ERISA liens generally are works in progress. This blog is intended to raise the awareness of the workers’ compensation bar of the necessity of seriously addressing ERISA liens, not to serve as a how-to guide in every case. Each case will have its own unique issues, so always keep this in mind, and whenever in doubt, request the documents, don’t ignore!!

(Editor’s Note:  Many thanks to Attorney Al Vitarelli for sharing this highly entertaining and educational blog on a topic most practitioners knew very little about but one that we all need to pay close attention to).

Until 1979 New Jersey had a doctrine known as the “going and coming rule,” and that rule basically said that employees were not covered for workers’ compensation when they were going to work or coming from work.  Scores of exceptions emerged over the years, creating a patchwork of inconsistency, thus prompting the New Jersey Legislature to adopt a more uniform doctrine known as the “premises rule.”

There is one basic principle for the premises rule as well as one main exception:  1) An employee is covered when he or she is injured on work premises if those premises are owned or controlled by the employer; and 2) An employee is covered when he or she is required by the employer to be away from the employer’s place of employment when performing duties authorized by the employer.

Think of the premises rule as a protective blanket covering the employee when situated on any area owned or controlled by the employer, including parking lots owned or controlled by the employer, walkways owned or controlled by the employer, cafeterias, restrooms or offices owned or controlled by the employer.  It makes no difference where on the premises the injury takes place:  one is just as protected for workers’ compensation purposes in a company cafeteria, coffee station, restroom or company parking lot as in one’s own office.

The old adage in real estate applies:  location, location, location.  The premises rule focuses literally on where the accident or injury takes place, and a few feet off-premises can make all the difference in the world.  In one case, a Harrah’s casino dealer finished her shift and proceeded to her car.  As the claimant’s vehicle pulled out of the lot, it collided with another vehicle.  The impact occurred on MGM Mirage Boulevard, but a portion of the rear of claimant’s vehicle was positioned over the Harrah’s driveway apron.  The Judge of Compensation measured the area of the injury and determined that one foot of claimant’s vehicle was still in the area of the parking lot controlled by Harrah’s.  Therefore the case was found compensable. Burdette v. Harrah’s Atlantic City, No. A-4797-12T1 (App. Div. January 17, 2014).

It is important to appreciate that it doesn’t matter in New Jersey whether the employee has clocked in or clocked out. That makes a difference under the Fair Labor Standards Act but not for purposes of workers’ compensation.  One could clock out of work but linger for 30 minutes talking to a co-worker about the latest Netflix series and then slip and fall in an employer parking lot.  The Judge of Compensation will focus on whether the employee was on the work premises for work purposes and whether there was any deviation from employment, such as playing soccer in the parking lot with friends.  Lingering after work to chat with co-workers is not a deviation from employment, and it happens all the time, as does arriving at work early before the employee’s technical start time.

For coverage under the premises rule, the employee must be on the premises for purposes of doing work.  If an employee visits the office on a Sunday when the office is closed to pick up papers for the Fantasy Football team, only to slip and fall in the building,  that injury would not be covered for workers’ compensation purposes because it did not occur during the course of employment.

But what about parking lots that are not owned or controlled by the employer?  Where does the work premise begin when someone arrives at a parking lot adjacent to an office where the employer is just a tenant on the third floor?  The premises rule in that situation does not protect an employee injured in that parking lot because the employer is just a tenant and generally would not own or control the lot.  Reading the lease agreement is essential, of course. The same is true of injuries in the entrance way of the office building, or even the elevator in most situations.  In the third floor tenant situation, the premises are only reached when the employee gets to the third floor because that is the area controlled or owned by the employer.   Exceptions exist where the employer has a lease that requires the employer to pay for maintenance, snow removal or there is other evidence of control by the employer of the parking areas.

The last point to remember about the premises rule is that the injury must always arise from the employment to be compensable.   Injuries frequently occur at work that are not caused by work.  Example:  an employee with arthritis is walking to the manager’s office and feels sudden pain in her knee.  She does not fall but some damage definitely occurs in the process of walking.  Judges will generally find that such an injury did not arise from work because the work conditions or premises did not cause it.  That type of injury could have happened anywhere, and the employee’s injury was not caused by a fall on a hard surface of the premises (which would change the result).  The same is true of an employee who has shoulder problems from playing basketball but who feels sudden pain at work while putting on his coat.  That sort of injury happens at work but it is not compensable because work conditions did not cause it.

In the last analysis, the premises rule is a huge improvement over the former “going and coming rule.” In the 40 years since the 1979 Amendments, there has been a great deal of predictability in court decisions.  New Jersey judges and practitioners know the case and statutory law extremely well.  As a result, employers and adjusters have been able to make consistent and well-informed decisions on whether to accept or deny such cases.  But there will always be new and interesting fact patterns under the premises rule.  For one, more and more employees work from home, presenting new and challenging fact patterns for judges to consider.  As these home injuries occur in different parts of the home or driveways outside the home, cases will be tried, fundamental principles will be applied, and fairly predictable rules will emerge.

The post The Very Sensible Premises Rule In New Jersey Workers’ Compensation appeared first on NJ Workers' Comp Blog.