NJ Contractors, Take Note: How OSHA Compliance Can Preserve Workers’ Compensation Immunity

Cohen Seglias Pallas Greenhall & Furman PC
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Contractors already know that ensuring their team members’ well-being tops the list of reasons for a strong safety and OSHA compliance program. A recent New Jersey state court decision just gave them another—preserving workers’ compensation immunity and its protection from potentially massive liability for employee personal injuries.
 

New Jersey’s Workers’ Compensation Act (WCA) guarantees an employee’s recovery for workplace injuries, but in exchange, caps the employee’s recovery and excludes all other remedies. As a result, employees cannot sue their employers for negligence or to recover pain and suffering. However, the Act has one exception to this immunity: when the employer’s intentional wrongs caused the employee’s injury.

The New Jersey Superior Court clarified what “intentional wrongs” means in Hocutt III v. Minda Supply Company, 464 N.J. Super. 361 (App. Div. 2020), in which a warehouse worker sued his employer for injuries sustained while riding a forklift, as the employer directed, but against the OSHA regulations for which the employer was cited. After the trial, the court ruled that the WCA barred the claim. The plaintiff appealed under the “intentional wrong” exception, arguing that the employer repeatedly directed employers to ride forklifts, which OSHA deemed a “serious” violation in the citation. The Appellate Division rejected the plaintiff’s arguments because the exception only applies in very narrow circumstances, when the employer knows its actions are substantially certain to result in injury or death to the employee, which did not happen in this case.

Historically, New Jersey courts found that when employers actively mislead employees about known safety risks or fraudulently conceal those risks from their employees, the employer may be substantially certain that the result of its deceitful actions may be injury or death to an employee. Further, when employers have advanced notice of an unsafe practice but refuse to stop the behavior, the employers’ actions may meet the “substantially certain” standard. An employee may use prior accidents, injuries, employee complaints, or OSHA citations to show that an employer had such advanced notice.

In Hocutt, however, the Court found that the employer did not have advanced notice that riding on forklifts could lead to employee injuries or death because there were no prior accidents, injuries, or OSHA citations. The Court, however, suggested that an employer does commit an intentional wrong when it repeats an unsafe practice despite prior accidents, OSHA citations, or other warnings. That means contractors should correct known OSHA violations promptly and vigorously defend against any OSHA citation received. If not, contractors risk that such repeated citations may open themselves up to liability for an employee’s personal injury damages, including pain and suffering. Worse, most insurance policies do not cover claims arising under the WCA’s “intentional wrong” exception.

To avoid the substantial, uninsured risk that could result from inadvertently waiving worker’s compensation immunity and facing potential liability for employees’ injuries, contractors should:

  • Develop, implement, and strictly enforce safety policies, including site-specific safety plans, especially for activities that present a serious risk of harm;
  • Require regular employee training to ensure employees understand and follow company safety policies;
  • Hold regular safety meetings, where safety professionals address common safety risks;
  • Monitor workers with an OSHA-trained supervisor to address any potential safety violations before they occur; and
  • Adopt and enforce a progressive discipline policy.

Contractors that receive an OSHA citation should hire competent OSHA counsel to defend against it, especially for “repeat” citations. Doing so can help avoid the potentially ruinous consequences of repeated, similar safety violations. If you are a contractor concerned about OSHA compliance and your company’s safety policies and procedures, the attorneys at Cohen Seglias are here to help. Please feel free to reach out to discuss ways in which you can improve your company’s safety practices.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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