A Willful OSHA Violation Insufficient to Circumvent The Workers’ Compensation Act’s Bar on Lawsuit Against Employer

The New Jersey Supreme Court recently held that a willful violation of the Occupational Safety and Health Administration (“OSHA”) standards, without other evidence of an employer’s intentional conduct, is insufficient to overcome the workers’ compensation bar on lawsuits against employers.  The workers’ compensation bar generally precludes an employee’s claim against his or her employer for workplace injuries.  An exception to that general bar occurs in cases in which the employer’s wrongful conduct was intentional.

In Van Dunk v. Reckson Associates Realty, A-69-10 (June 26, 2012), the plaintiff, Van Dunk, was employed by James Construction Company, Inc. (“James”) as a laborer.  James was hired to perform site preparation including excavating a trench.  While excavating the trench, Van Dunk was instructed to go into the trench, which subsequently caved in, causing him serious injury.

OSHA investigated the accident and issued a citation to James alleging a willful violation of its construction standards.  The basis for the willful violation was an admission by James’ project superintendent that the “sloping” of the trench did not meet OSHA standards.  This resulted in OSHA finding that James’ non-compliance with OSHA’s trenching standard was “not an accident or negligence.”  OSHA concluded that James committed a willful violation.  A willful violation has been defined by the courts to be an “act done voluntarily with either intentional disregard of, or plain indifference to [the Occupational Safety and Health Act’s] requirements.”  James did not contest the citation, and subsequently settled with OSHA.

Van Dunk sued James and others for damages arising out of his injuries.  The lower court granted James’ motion for summary judgment, finding that Van Dunk “failed to show that [James’] conduct met the intentional-wrong standard for overcoming the exclusivity of the workers’ compensation remedy.”  The Appellate Division reversed, stating that the lower court failed to give sufficient weight to OSHA’s citation to James for a willful violation.

James’ petition for certification to the New Jersey Supreme Court was granted, and the Supreme Court reversed.  The Court initially reviewed the history of the Workers’ Compensation Act and the cases interpreting the “intentional wrong” provision of that law.  The Court observed that under the Workers’ Compensation Act, an employee must show that the employer committed an “intentional wrong” in order to sue his/her employer.  The Court further noted that in the seminal case Millison v. E.I. du Pont de Nemours & Co., 101 N.J. 161 (1985), it adopted the “substantial certainty” standard to determine if an employer committed an intentional wrong.  The Millison Court articulated a two-step analysis in assessing whether a claim is an intentional wrong:

First, a court considers the “conduct prong,” examining the employer’s conduct in the setting of the particular case.  Second, a court analyzes the “context prong,” considering whether “the resulting injury or disease, and the circumstances in which it is inflicted on the worker, [may] fairly be viewed as a fact of life of industrial employment,” or whether it is “plainly beyond anything the legislature could have contemplated as entitling the employee to recover only under the [workers’] Compensation Act.”  (citations omitted).

After reviewing its decisions applying the “substantial certainty” standard, the Court stated that every willful OSHA violation does not constitute an intentional wrong.  Rather, an OSHA citation is only one factor among the totality of the circumstances to be considered when determining if an intentional wrong was committed.  The Court ultimately held that “the finding of a willful violation under OSHA is not dispositive of the issue of whether the employer in this case committed an intentional wrong.”  The Court noted that to do otherwise would produce detrimental consequences such as encouraging employers to dispute OSHA violations rather than settle the matter.

The Court in Van Dunk concluded that the events leading up to the trench cave-in did not rise to “egregious circumstances involving intentional persistent OSHA safety violations” that existed in other cases where the employer’s conduct was found to be intentional.  The Court noted that while the employer’s conduct could be gross negligence, the actions were the result of poor decision-making and did not rise to the level of “substantial certainty” that is required to avoid the exclusivity bar of the Workers’ Compensation Act.  The Court concluded that the Workers’ Compensation Act prevented the plaintiff’s action.

Employers need to be proactive when dealing with safety and health matters.  It is imperative and beneficial to establish safety policies and procedures to protect employees.  Strict implementation of those safety rules will help employers reduce their potential OSHA liability and protect their employees.  As a collateral benefit, lawsuits by employees that are injured on the job will also be minimized or eliminated.  Although the bar for employees to sustain such lawsuits is high, as noted in the Van Dunk case, employers could expend an inordinate amount of time and resources in defending against such lawsuits. Thus, providing a safe and healthful workplace will ultimately result in real savings to employers.