Joint employees are employees that work for more than one employer. Since they are becoming more and more common, the Appellate Division in the State of New Jersey has shed some light on the factors to be considered in determining which employer is liable for the joint employee. Some of the most important factors to consider are as follows:
Which employer’s interest/benefit was the employee furthering at the time of the accident?
Which employer’s name is on the workers’ compensation policy?
Which employer has the right to control the details of the joint employee’s work?
How is the joint employee paid?
In Chalmers v. Swartz, (Decided October 8, 2013 unpublished) the Superior Court of New Jersey, Appellate Division, shed some light on the factors to be considered when determining whether an employee is a “joint employee,” and whether or not that employee’s claim should be brought before the Division of Workers’ Compensation as opposed to the Law Division. This determination has a major impact on which insurance policy will provide coverage.
The Plaintiff, June Chalmers, was an employee who provided cleaning services for a father-son medical practice. She fell and sustained serious injuries while taking out the garbage at night. About six months later, rather than filing a workers’ compensation claim, she filed a lawsuit for personal injuries in the Law Division against the son, Dr. Stephen Swartz (Stephen), who with his father, Dr. Harry Swartz (Harry), had the father-son medical practice in the building, which was owned by Stephen. Plaintiff claimed that she was solely employed by Harry, and so to avoid the bar of the Workers’ Compensation Act, she sued Stephen for negligence because he owned the building.
The bar of the Workers’ Compensation Act, N.J.S.A. 34:15-8, precludes an employee from filing a negligence lawsuit against an employer. In an attempt to circumvent the bar, Plaintiff testified that Harry hired her and was the one who gave her directions in performing her job. Harry’s name was also on the W-2 forms, and he signed her checks. However, the Defendant-Doctors pointed out that the checks were from the practice’s joint checking account in which both doctors’ names appeared on the checks. The medical practice was also covered by a workers’ compensation policy which named both Harry and Stephen as the employers, and was paid for out of the joint checking account. The same joint checking account also paid for their business owners’ liability insurance.
In determining whether or not the Plaintiff was considered a joint employee of both Stephen and Harry, the Court relied on Domanoski v. Borough of Fanwood, 237 N.J. Super. 452 (App. Div. 1989). This case focused on employees that are simultaneously employed by more than one employer. The question to consider in a joint employment scenario is whether, at the time of the injury, the petitioner/plaintiff was the employee of one, or the other, or both, of the employers.
In order to determine which employer is liable, the court focuses on several different factors, such as separate agreements between the employee and each employer, the determination of whose work is being done at the time of the injury, which employer has the right to control the details of the work, which employer pays, and which employer has the power to hire, discharge, or recall the employee. Most importantly, in dual employment situations, the court looks to see whose interest the employee was furthering at the time of the accident. The determination is made based upon the specific facts of the particular case at hand; it is not a mechanical or automatic application.
The Court in Domanoski concluded that an off-duty police officer, injured while working as a supermarket security guard, with the town’s permission, was a joint employee of the town and the supermarket, because the Court found he was serving the public interest as well as a private one. Both employers were obligated to share the expense of providing him with workers’ compensation benefits.
In Chalmers, the Court concluded that the Plaintiff was the joint employee of both doctors in the medical practice. She cleaned the whole building, not just Harry’s work space. She was paid from a joint checking account in the names of both doctors. She was covered by a workers’ compensation policy in the name of both doctors, which also listed both doctors as her employers. Significantly, even if Harry directed Plaintiff’s work, she still performed her work for the benefit of both Harry and Stephen. Both doctors also shared all of the expenses of the practice and shared authority to make employment and other management decisions. Though Stephen owned the building, it was transferred to him from his father, Harry, for nominal consideration, years before the subject accident. And even though Stephen owned the building, there was no lease and he did not charge rent.
Of note, the Court did not dismiss this action in its entirety. Rather, the Court transferred this case from the Law Division to the Division of Workers’ Compensation in the interests of justice, particularly in light of the fact that the case was filed timely, albeit, in the wrong Court. Nevertheless, it is important to flesh out the facts surrounding the employer/employee relationship, especially since it will play a vital role in determining which insurance carrier will pay for the defense of the matter.
By Joseph C. Megariotis, Esq.