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An Employee Cannot Waive the Right to Sue a Third Party as a Condition of Employment

Dec 13, 2019

Pennsauken, NJ (Law Firm Newswire) December 13, 2019 – The Supreme Court of New Jersey ruled that an employer cannot require an employee to agree, as a condition of employment, that they will not sue the employer’s customer in connection with a work injury.

Allied Barton Security Services (Allied Barton) hired a security guard. Allied Barton required the man to sign a Workers’ Comp Disclaimer (Disclaimer) waiving any right he might have to bring a claim against any customer of Allied Security related to injuries covered under the workers’ compensation statutes.

Allied Barton assigned the security guard to Schering-Plough’s facility. The security guard fell down the stairs leading to a guardhouse basement. The guard and Allied Barton settled his workers’ compensation claim. The man then filed a premises liability suit against Schering-Plough. A trial judge denied Schering-Plough’s motion for summary judgment based on the Waiver. A jury awarded the guard $900,000 in damages.

An Appellate Division of the Superior Court of New Jersey found the Waiver invalid. The Appellate Division reversed the jury’s verdict because the trial court did not consider whether the guard was comparatively negligent. On appeal to the Supreme Court of New Jersey, Schering-Plough argued that the Waiver was enforceable.

A New Jersey statute (N.J.S.A. 34:15-39) states that an agreement or release of damages, made before an accident happens, is not valid and is against public policy. The statute has been applied to declare invalid pre-accident agreements waiving the right of an employee to seek workers’ compensation benefits for a work injury.

In a decision released on December 11, 2017, the Supreme Court of New Jersey ruled that the statute also renders invalid pre-accident agreements waiving an employee’s right to bring a tort action against a third party based on a work accident. The Supreme Court said the Waiver was against the public policy stated in the statute.

The court added that enforcing the Disclaimer would disrupt the balancing of interests the legislature sought to achieve in another statute (N.J.S.A. 34-15-40). That statute gives a workers’ compensation carrier a lien on any damages awarded to an employee in a third-party action for the amount it paid in workers’ compensation benefits.

Suffered a work injury on the premises of an employer’s customer or client? Filing a suit against the customer for damages is the best option. Talk to a workplace lawyer at Petrillo and Goldberg at 856.249.9295 or visit https://www.petrilloandgoldberg.com.

Petrillo & Goldberg Law

6951 North Park Drive
Pennsauken, NJ 08109

19 South 21st Street
Philadelphia, PA 19103

70 South Broad Street
Woodbury, NJ 08096

Phone: 856-486-4343
Fax: 856:486-7979

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