Waiver Of Right To Sue Is Void As It Is Against Public Policy
April 2, 2018
The Supreme Court of New Jersey has decided that an employee's agreement at the beginning of his employment to prospectively waive all third-party claims against his employer's customers in the event that he was injured at the workplace facility of a customer is void as it is contrary to public policy expressed in the Workers' Compensation Act. The case is Vitale v. Schering-Plough Corp., 174 A. 3d 973 (N.J. 2017).
Philip Vitale was hired by Allied Barton Security Services as a security guard. When he was hired he was required to sign an agreement called the “Worker's Comp Disclaimer” as a condition of his employment. The Disclaimer included a waiver of Vitale's rights 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.” Vitale was later assigned to provide security services at a facility called Schering-Plough Corporation, and while on duty he was seriously injured in an accident. Vitale recovered benefits under New Jersey's workers' comp law, and then sued Schering-Plough for negligent maintenance of premises. Schering-Plough moved for summary judgment arguing that Vitale had signed away his rights to sue them when he executed the Worker's Comp Disclaimer. The trial court held that the Disclaimer was void as it was contrary to public policy, and denied the motion for summary judgment. The case went to trial where a jury awarded Vitale $900,000 in compensatory damages. An appellate court affirmed the trial court's decision, and the case reached the New Jersey Supreme Court.
The question that the New Jersey Supreme Court must address is whether or not the Disclaimer is enforceable. The Disclaimer provided that workers' comp statutes cover work-related injuries and that in exchange for employment, Vitale waives and forever releases any and all rights to make a claim, file a lawsuit, or recover damages from a customer of Allied Security. The workers' compensation statutes state that “No agreement, composition, or release of damages made before the happening of any accident . . . shall be valid or shall bar a claim for damages for the injury resulting therefrom, and any such agreement is declared to be against public policy.”
The court determined that the Disclaimer could not be enforced because it went against public policy as mentioned specifically in the statute. Although workers' compensation is meant to be an exclusive remedy for on-the-job injuries, the New Jersey workers' compensation statutes provides that an employee's right to workers' compensation benefits does not preclude their assertion of common law personal injury claims against a liable third party. The court also said that the broad language in the statute mentioned above encompasses not only pre-accident agreements waiving a right to claim workers' comp benefits, but also agreements waging an employee's right to assert a common law action for damages against a third party based on a workplace accident. The trial court will get this case back to determine the liability of Schering-Plough.
Editor's Note:
The workers' compensation statute specifically said that agreements like the one Vitale was forced to sign as a condition to his employment were against public policy, and were thus void. Vitale's employer was attempting to protect his customers from claims filed by his employees, and probably figured that his employees would be able to recover workers' compensation and should not be able to double dip in recovery, but although workers' compensation is an “exclusive remedy” for an on-the-job injury, there are some cases where an employee can still sue an employer (or in this case a customer of their employer) for an on-the-job injury including cases where the employer intentionally injured the employee, or if the employer is acting in a capacity other than employer at the time of the injury.