[authors: Amy L. Bashore, Denise M. Kesyer, Steven W. Suflas]

A willful violation of federal safety standards does not, on its own, overcome the worker’s compensation bar against civil suits, the New Jersey Supreme Court ruled in its June 26, 2012 decision in Van Dunk v. Reckson Assocs. Realty Corp.

Worker’s compensation is typically the exclusive remedy when an employee suffers an on-the-job injury. However, there is an exception to worker’s compensation preemption of civil suits when the employer commits an “intentional wrong.”

In Van Dunk, the plaintiff was a laborer on a construction project, working to excavate a 20‑foot‑deep trench. When workers encountered difficulty laying fabric in the trench, the plaintiff volunteered to go into the trench to straighten the fabric. The project manager, who was also the designated on-site “competent person” under the Occupational Safety and Health Act (OSHA) declined his offer because of the risk of a trench collapse. When the problems with the fabric persisted, the project manager, out of frustration, changed his mind and directed the plaintiff to go into the trench to adjust the fabric. Minutes after the plaintiff began adjusting the fabric, the trench collapsed, burying the plaintiff up to this chest and causing multiple serious injuries.

During the on-site OSHA investigation, the project manager admitted that he had knowledge of the relevant OSHA requirements, but did not follow those standards for protecting the trench against cave-ins. OSHA determined that the construction company committed a willful violation of OSHA standards. The plaintiff subsequently brought a civil suit against multiple parties, including his direct employer and the company that contracted with the direct employer, for damages arising from his injuries.

The trial court granted summary judgment to the employer defendants, holding that the plaintiff failed to meet the “intentional wrong” exception to the statutory worker’s compensation bar on civil suits. The Appellate Division reversed. Although the appellate court did not find the OSHA willful violation dispositive, it concluded that it should have been considered.

After hearing oral argument in October 2011, the New Jersey Supreme Court this week reversed the appellate court’s decision. The Court first held that a willful OSHA violation is not dispositive as to whether the employer committed an intentional wrong. However, the Court agreed with the appellate court that such a violation should  be considered as one factor in the totality of circumstances.

Next, the Court reaffirmed the standard for “intentional wrongs” first espoused in Millison v. E.I. du Pont de Nemours &Co.—a two-step analysis that requires a court to consider both conduct and context.

Under the “conduct prong,” courts determine whether the employer knew that its actions were substantially certain to result in injury or death to the employee. (“Substantially certain” is defined as virtually certain, more than gross negligence.)

Under the “context prong,” courts look for a showing that the resulting injury and the circumstances of its infliction on the worker was more than a “fact of life” of industrial employment, but instead was plainly beyond anything the legislature intended the Workers’ Compensation Act to immunize.

In Van Dunk, the Court applied the Millison factors and concluded that the plaintiff failed to meet the conduct prong.  The Court concluded that the alleged conduct fell short of the egregious circumstances of prior cases, which involved affirmative actions to remove safety devices, prior OSHA citations, deliberate deceit, knowledge of prior injuries or accidents, and/or previous complaints by employees as well as evidence of long-term OSHA or safety non-compliance. By contrast, the Court characterized the project manager’s decision in Van Dunk as a quick one, made out of frustration, for an employee to perform a brief task. Such circumstances do not give rise to a substantial certainty of injury or death. The Court also concluded that the plaintiff had not met the context prong.

Significantly, the Court was also critical of the Appellate Division’s reliance on the plaintiff’s argument that the defendants allegedly disregarded safety to increase profit and productivity. The Court noted that such a standard was too broad and invited the possibility that it would inappropriately chasten an employer that acts with economic business motivation.

With the Van Dunk decision, New Jersey’s Supreme Court declined to expand Millison beyond the egregious circumstances presented in prior case law or to allow further erosion of worker’s compensation immunity for employers.

Ballard Spahr’s Labor and Employment Group routinely assists employers in OSHA compliance. Additionally, our product liability attorneys have substantial experience defending industrial workplace accident claims, including successfully refuting claims of waiver of the tort immunity afforded by the Workers’ Compensation Act. For more information, please contact Steven W. Suflas at 856.761.3466 or suflas@ballardspahr.com, Denise M. Keyser at 856.761.3442 or keyserd@ballardspahr.com, Amy L. Bashore at 856.761.3402 or bashorea@ballardspahr.com, or the Ballard Spahr attorney with whom you work.