In a recent unpublished decision, Soto v. ICO Polymers North America, the Appellate Division reversed the Trial Court’s grant of summary judgment to Plaintiff’s employer, Defendant ICO Polymers, based on immunities provided by the Workers’ Compensation Act. The Appellate Division determined that the failure to remediate numerous OSHA and safety violations can constitute an intentional wrong so as to vault the immunities provided by the Workers’ Compensation Act when an employee is injured as a result of those violations.
ICO is a company that pulverizes plastic pellets. The process creates a highly combustible fine powder that is both a product and a byproduct of its business. In 2007, approximately one year prior to the Plaintiff’s injuries, the ICO facility in Asbury suffered a fire after accumulations of powder ignited, which injured an employee and caused damage to the facility. OSHA investigated the fire and ultimately penalized ICO for failing to properly maintain the cleanliness of the facility, in addition to having unsafe equipment and wiring installations. Despite a directive from ICO’s President that hazardous must be abated, including upgrades in equipment to minimize accumulations of powder, evidence demonstrated that no updates actually occurred prior to the Plaintiff’s accident. Indeed, several witnesses who observed the facility after the initial 2007 fire testified to observing significant dust accumulations throughout the building.
ICO began constructing a new production facility in Allentown, which contained equipment that was sealed, explosion-proof, and designed to minimize contact between wiring and combustible dust. In contrast, the Asbury Park facility lacked such equipment. During construction, the Asbury facility continued production. Twelve days before the Plaintiff’s accident, the State of New Jersey shut down the Asbury facility for fire code violations that included a non-functioning sprinkler system, non-functioning exit door, electrical work installed without current protection, and failure to provide exit signs. ICO contracted the repair work to a third-party entity; however, at no time did the upgrade the Asbury facility to minimize potential explosions like in the new Allentown facility, and as promised to OSHA.
The Plaintiff was injured in a second explosion on July 26, 2008, at the Asbury facility. Although Plaintiff was awarded Workers’ Compensation benefits, he still filed a Third-Party lawsuit against ICO, asserting that their conduct was not protected by the immunities afforded by the Workers’ Compensation Act.
Pursuant to the Workers’ Compensation Act, if an injured employee is granted workers’ compensation benefits, he or she is barred from filing a lawsuit against the employer. However, there is an exception, pursuant to Laidlow v. Hariton Machinery Co., Inc., 170 N.J. 602 (2002), for circumstances in which a plaintiff can show an intentional act by his or her employer.
Generally, Courts decline to expand the Laidlow exception, because it is more expeditious and efficient to address on-the-job injuries through the Workers’ Compensation courts. See Van Dunk v. Reckson Associates Realty Corp., 210 N.J. 449, 451 (2012) (noting that the Workers’ Compensation framework “provides a prompt and efficient remedy for an employee’s claim against an employer for a workplace injury.”). The Appellate Division noted that in order for a plaintiff to overcome the Workers’ Compensation bar, he or she must show that the employer committed an intentional wrong. Subsequent case law has defined an intentional wrong as employer conduct that causes a substantial certainty of injury or death; that is known as the substantial certainty prong. A plaintiff must also establish the context prong, which is that the resulting injury is more than a fact of life of industrial employment and that it was plainly beyond anything the Legislature would have intended the Act to immunize.
The Court determined that since ICO had affirmatively promised to abate any OSHA violations, but continued to allow combustible dust to accumulate in hazardous amounts throughout the Asbury plant, a reasonable jury could find that ICO engaged in a cost-benefit analysis and decided that it was more economically sound to place Plaintiff at a substantial risk of serious injury or death than to repair the Asbury facility’s electrical system, in accordance with enhanced safety standards. Thus, there was a question of fact as to whether ICO was immune from the Plaintiff’s Third-Party lawsuit, thus permitting the matter to move forward to a jury.
This case, although unpublished, expands the definition of an “intentional act” in a Laidlow claim as it pertains to defeating the general Workers’ Compensation bar. Indeed, the Appellate Division appears to have considered the employer’s omissions as well as its representations to OSHA to find an intentional act and to allow Plaintiff’s claims to survive. This expansion could mean greater exposure for employers outside of the scope of Workers’ Compensation and could permit more Plaintiffs to file direct claims against their employers.
Notwithstanding the potential expansion, it appears that the Court based its decision heavily on the facts of this particular matter. Indeed, the Court took pains to highlight not only the prior OSHA violations, but also ICO’s promises to remedy the situation and subsequent failure to do so, more than one year after the accident. Nevertheless, employers must be cognizant of OSHA violations, and actually remediate them, or otherwise face the possibility of a direct employee suit for injuries resulting from unabated violations.