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New Jersey Supreme Court Finds Waiving Workers’ Compensation Claims Violates Public Policy

The New Jersey Workers’ Compensation Act, N.J.S.A., 34:15–1 to -146 (Workers Compensation Act), protects and allows workers who are injured on the job to receive compensation and be made whole for their injuries. This protection generally extends to third parties as well. For example, if an employer (IT, security, or custodial firm etc.) farms out their employees for use by a third party, the third party can be held liable to the employee for common-law personal-injury or wrongful-death claims. N.J.S.A., 34:15–40.  This is true even after the employee received workers’ compensation benefits from his or her original-direct employer.

Some employers and third-parties have tried to protect themselves from third party claims by requiring prospective and current employees to sign waivers releasing the company from third-party liability for workers’ compensation in the event the employee is injured while working for those third parties. Recently, the New Jersey Supreme Court held that such waivers violate New Jersey public policy, and therefore, are invalid and unenforceable.

In Vitale v. ScheringPlough Corp., No. 078294, 2017 WL 6398725 (N.J. Dec. 11, 2017), Plaintiff, Philip Vitale (Vitale), was hired by Allied Barton Security Services (Allied Barton), as a security guard. When it hired Vitale, Allied Barton required him to sign an agreement entitled “Worker’s Comp Disclaimer” (“Disclaimer”) as a condition of his employment. In the disclaimer, Vitale agreed to “waive and forever release any and all rights” that he may have had to assert a claim “against any customer … of Allied Security to which [Vitale] may be assigned, arising from or related to injuries which are covered under the Workers’ Compensation statutes.” Id. at *3.

Allied Barton assigned Vitale as a security provider for its client, defendant, Schering–Plough Corporation (Schering–Plough). While on duty at Schering–Plough’s facility, Vitale was seriously injured falling down the basement stairs. After recovering benefits under the Workers’ Compensation Act, Vitale filed a third-party action, alleging that Schering–Plough negligently maintained its premises causing his injuries. Schering–Plough asserted that Vitale waived his negligence claims against Schering–Plough when he executed the Disclaimer.

In ruling against Schering–Plough, the New Jersey Supreme Court found: (1) that under N.J.S.A., 34:15–40 of the Workers Compensation Act you can still pursue common-law personal-injury or wrongful-death claims against a liable third party even after receiving workers’ compensation benefits; and (2) The Workers Compensation Act  under N.J.S.A., 34:15–39  expressly declares that any “agreement, composition, or release of damages made before the happening of any accident” is contrary to public policy. Id. at *4. Therefore, the Supreme Court found the waiver was invalid and remanded the issue of liability to trial. Id. at *12.

At Mashel Law LLC, we are well experienced in handling personal injury and employment claims. If you believe you have been a personal injury victim or have been unlawfully treated by an employer, call the attorneys at Mashel Law (732) 536-6161 or fill out the contact form on this page for immediate help. At Mashel Law, LLC, located in Marlboro, New Jersey, we are dedicated to protecting the rights of employees.