NJ Workers’ Compensation Court Should Determine Employment Status Issues

The New Jersey Appellate Division recently held that the Division of Workers’ Compensation courts should determine whether an injured person is an “employee” as opposed to an “independent contractor.” In New Jersey, an injured employee must file any claims against his/her employer in Workers’ Compensation court. An independent contractor, however, may sue the employer in Superior Court.  Personal injury attorneys typically prefer to argue that the injured person in an independent contractor because the awards are more lucrative in Superior Court.

The recent case Estate of Kotsovska v. Liebman, arose out of an automobile accident. Myroslava Kotsovska, a home health aide, died after being struck by an automobile operated by her employer, Saul Liebman. Ms. Kotsovska, was a passenger in a vehicle, operated by the eighty-one-year-old Mr. Liebman.  She exited the car and waited for Mr. Liebman to park. Unfortunately, Mr. Liebman accelerated his vehicle in an unintended fashion and struck Ms. Kotsovska, thereby causing a leg amputation and her death within the hour. Ms. Kotsovska was Ukrainian and her entrance visa did not permit her to seek employment. Regardless, she was being paid at the rate of $100.00 per day on a seven-day-a-week basis, to reside with Mr. Liebman and attend to his basic household needs.

After the accident, her Estate filed suit against Mr. Liebman in Superior Court. No petition in Workers’ Compensation court was ever filed on her behalf. During the course of the case, Mr. Liebman’s attorney attempted to have the case transferred to the Division of Workers’ Compensation, arguing that Ms. Kotsovska was an employee and not an independent contractor. The Superior Court rejected these arguments and the case ultimately went to trial, resulting in a jury verdict of $565,000.00.

Mr. Liebman then filed an appeal, and the Appellate Division determined that the trial court wrongly allowed the jury to decide Ms. Kotsovska’s employment status. The Appellate Division then sent to case to the Division of Worker’s Compensation for a determination as to whether Ms. Kotsovska was an employee.

As a practical matter, if cases involving the employee/independent contractor issue must now be routinely transferred to the Division of Worker’s Compensation, then many cases will have to be transferred back once the Worker’s Compensation court determines that someone is an independent contractor. This seems to be a rather inefficient approach that could potentially add years of time and more costs to these cases.

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