In Kotsovska v. Liebman, the New Jersey Supreme Court grappled with the question of whether the doctrine of primary jurisdiction deprives the Superior Court of jurisdiction under the Workers’ Compensation Act (“WCA”) to determine a worker’s employment status in cases where the defendant raises the exclusive remedy provision of the WCA as an affirmative defense to the worker’s Complaint. Scrutinizing the WCA, prior precedent and the doctrine of primary jurisdiction, the Court held that in cases where a genuine dispute exists as to the employment status of the worker — whether an employee or independent contractor — and the worker files suit only in the Superior Court, then the Superior Court has concurrent jurisdiction to resolve the dispute. The Court’s holding overturns the appellate court’s ruling that the Division of Workers’ Compensation is the proper forum to determine employment status once the WCA defense is raised in the Superior Court.
In this case, Plaintiff, who acted as caretaker for Defendant, was killed when Defendant accidently struck her with his car. Under the WCA, claims for injury to or the death of an employee must be filed with the Division of Workers’ Compensation and employees are precluded from filing suit against the employer in Superior Court. On the other hand, independent contractors are not limited by the WCA and can file a suit for injuries or death against the employer in Superior Court.
In this case, the estate of Plaintiff filed suit for wrongful death in Superior Court against the employer; no claim was filed with the Division of Workers’ Compensation. Defendant conceded negligence, but asserted the affirmative defense that Plaintiff was his employee and could only recover under the WCA in the Division of Worker’s Compensation.
The trial court refused to transfer the case to the Division of Worker’s Compensation and a jury found in favor of Plaintiff, awarding $525,000.00 in damages. Defendant appealed and the appellate court reversed the trial court’s decision. While the court found that the matter should have been transferred to the Division of Workers’ Compensation, it reversed on the basis that the jury charge addressing the distinctions between employees and independent contractors was legally deficient.
The Supreme Court of New Jersey granted Plaintiff’s petition for Certification and addressed both issues on appeal—the appellate court’s determinations that the WCA required the matter to be heard in the Division of Workers’ Compensation and that the deficiencies of the jury charge necessitated reversal. With respect to the first issue, after reviewing the WCA and precedential cases, the Court noted that Plaintiff did not file any claim under the WCA in the Workers’ Compensation Division. Accordingly, the court found that the parties could not presume to have accepted the provisions of the WCA, including the exclusive remedy provision, until a threshold determination was made as to whether the worker was an employee or an independent contractor.
The question that arose was whether the Superior Court had jurisdiction to make that threshold determination.
The Court recognized that there was a genuine dispute as to whether Plaintiff was an employee or an independent contractor. Since Plaintiff had never filed a claim with the Division, however, there was no pending matter over which the Division could assert jurisdiction. Therefore, the Court determined that the Superior Court had jurisdiction to decide the question of Plaintiff’s employment status.
The next issue the Court addressed was whether the court erred in declining to transfer the matter to the Division under the doctrine of primary jurisdiction. Employing a four part test regarding the applicability of primary jurisdiction, the Court held that the question of a workers’ employment status is often determined by Superior Court trial judges and juries under a variety of circumstances, that the Division was in not better position than the Superior Court in making this threshold determination, and that there was no risk of inconsistent rulings since Plaintiff did not file a claim with the Division. Accordingly, the Court held that the doctrine of primary jurisdiction did not apply and that the Superior Court had concurrent jurisdiction to determine Plaintiff’s employment status.
With respect to the jury charge issue, the Court determined that while the charge was somewhat deficient, it did not misinform the jury as to controlling law and could not be the basis for reversal of the case. The charge in question is usually used on the context of a case involving questions of tort-based vicarious liability, which were not present in the instant case.
Interestingly, the Court held that while using this charge did not constitute reversible error, it also did not adequately address the differentiation in the analysis of worker status that is inherent in social legislation such as the WCA, as opposed to tort-based vicarious liability purposes. The Court adopted a hybrid approach to use in social legislation cases and referred the issue to the Supreme Court Committee on Model Civil Jury Charges for the development and adoption of a standard jury charge concerning the employee-independent contractor distinction in the contact of social legislation to incorporate the hybrid test the court adopted.
Since it determined that the Superior Court had concurrent jurisdiction to determine Plaintiff’s employment status and that the jury charge was sufficient, the Court reversed the decision of the appellate court and reinstated the jury’s verdict.
This case will have a lasting influence, especially given the fact that the Court requested the drafting of a new jury charge, in cases where the employment status of a worker is a primary issue of contention.