Marino v. Industrial Crating Co.

• Citation: 358 F.3d 241
• Decision Date: 19 February 2004
• Docket Number: No. 02-4429.,02-4429.
• Parties: Lawrence MARINO; Laura Marino, Appellants v. INDUSTRIAL CRATING CO. d/b/a Industrial Crating and Rigging Company; Oscar J. Boldt Construction Company; Mareal Paper Mills.
• Court: U.S. Court of Appeals — Third Circuit

358 F.3d 241

Lawrence MARINO; Laura Marino, Appellants v. INDUSTRIAL CRATING CO. d/b/a Industrial Crating and Rigging Company; Oscar J. Boldt Construction Company; Mareal Paper Mills.

No. 02-4429.

United States Court of Appeals, Third Circuit.

Argued November 20, 2003.

February 19, 2004.

Robert M. Miele [Argued], Burke, Miele & Golden, Suffern, for Appellants.

Stephen B. Fenster, Valerie A. Vladyka [Argued], Gallo Geffner & Fenster, Paramus, for Appellee.

Before RENDELL, BARRY and MAGILL,^* Circuit Judges.

OPINION OF THE COURT

RENDELL, Circuit Judge.

Lawrence Marino, an electrician employed by Kleinknecht Electric Company ("KEC"), was injured on August 7, 1998, in an accident during construction at the Marcal Paper Mills in Elmwood Park, New Jersey. At issue in this appeal is whether Marino, who was working with riggers on a task associated with the construction project at the time of his injury, should be deemed a "special employee" of the rigging company under New Jersey law. Because our jurisdiction is based on the diversity of citizenship of the parties,¹ and New Jersey law applies,² our task is to predict how the courts of New Jersey would resolve this issue if presented with these facts.

We do not write on a clean slate, as the courts of New Jersey have spoken on this general issue several times, and we have recently addressed this issue applying New Jersey law. The application of the law to the specific facts of Marino's work situation requires a careful analysis of the principles developed in the case law related to "special employment" situations. The District Court held that, applying those principles, Marino was a "special employee" of the defendant, Industrial Crating and Rigging Company ("ICR"). Since special employee status precludes the bringing of a negligence action against the special employer, the District Court granted summary judgment in favor of ICR and dismissed Marino's action with prejudice. We predict that the New Jersey Supreme Court would conclude otherwise, and will accordingly reverse and remand so that the matter may proceed to trial.

I.

In order to gain a contextual orientation, before exploring the facts, we will review the basic principles underlying this issue. The New Jersey courts have made it clear that special employer cases like this one are set against the backdrop of New Jersey's statutory workers' compensation scheme, set forth in the Workmen's Compensation Act ("WCA"), N.J. Stat. Ann. §§ 34:15-1 to -142. See, e.g., Santos v. Standard Havens, Inc., 225 N.J.Super. 16, 541 A.2d 708, 712 (App.Div.1988) (discussing the WCA and its definition of employees who are covered by the Act). Therefore, we must first have an understanding of the WCA and the policies behind it.

In New Jersey, employees who are injured while working are to receive workers' compensation benefits without regard to fault. Gore v. Hepworth, 316 N.J.Super. 234, 720 A.2d 350, 353 (App.Div.1998). When an employee receives workers' compensation benefits, he forgoes the right to seek additional tort remedies from his employer. Id. This waiver of remedies is explicitly detailed in the exclusivity provision of the WCA itself: "Such agreement [to accept WCA benefits] shall be a surrender by the parties thereto of their rights to any other method, form or amount of compensation or determination thereof than as provided in [the WCA], and shall bind the employee ... as well as the employer...." N.J. Stat. Ann. § 34:15-8.

The WCA was enacted as a mechanism that would protect employees who are injured in the workplace. However, another important objective of the WCA was to pass along the costs of industrial accidents "as part of the cost of the product or service provided." Santos, 541 A.2d at 712. Thus, New Jersey courts have liberally construed the term "employee" in the WCA "in order to bring as many cases as possible within [its] scope." Id. This is true when a plaintiff seeks its protection, as well as "when he attempts to have himself excluded from the coverage of the act." Id. at 713 (quoting Rutherford v. Modern Transp. Co., 128 N.J.Super. 504, 320 A.2d 522 (Law Div.1974)).

In construing the term "employee" liberally, New Jersey courts have made it clear that an employee may have several employers for WCA purposes, any one of which may be held liable for workers' compensation benefits when that employee is injured.³ Blessing v. T. Shriver & Co., 94 N.J.Super. 426, 228 A.2d 711, 713 (App. Div.1967). The result of this broad definition is that the acceptance of workers' compensation benefits from one employer will preclude a common law tort action brought by the employee against another employer. Id. The courts of New Jersey, in analyzing situations in which an employee might be found to have, in addition to his primary employer, an additional "special employer," have developed a five-factor test. This test, based on a treatise on workers' compensation, was first articulated and explained in Blessing.

The five factors of the test are summarized as follows: 1) whether there is an express or implied contract for hire between the employee and the employer; 2) whether the work being done is that of the employer; 3) whether the employer has a right to control the details of the work; 4) whether the employer pays the employee's wages or benefits; and 5) whether the employer can hire or fire the employee. Blessing, 228 A.2d at 713 (relying in part on 1A Arthur Larson, Workmen's Compensation § 48.00, at 710 (1966)). None of these factors is necessarily dispositive, and not all five must be satisfied in order for a special employment relationship to exist. Id. at 715. However, several courts have emphasized the importance of the third factor — the right to control. See, e.g., Volb v. Gen. Elec. Capital Corp., 139 N.J. 110, 651 A.2d 1002, 1005 (N.J.1995) (stating that "the most important factor in determining a special employee's status is whether the borrowing employer had the right to control the special employee's work"); Mahoney v. Nitroform Co., 20 N.J. 499, 120 A.2d 454, 458 (1956) (describing the right to control as "essential to the employment relation[ship]"); Blessing, 228 A.2d at 713-14 (noting that the "sheer weight of authority" regarding the predominant element of the special employment test "is undoubtedly on the side of `control'"). It is within this statutory and precedential framework that we analyze whether Marino was a special employee of ICR at the time of his injury.

II.

Keeping these principles in mind, we will move on to consider the factual setting of Marino's work and the accident. At the time of his injuries, Marino was a journeyman electrician and a member of Local 363 of the International Brotherhood of Electrical Workers ("IBEW"). The accident occurred while he was employed by KEC as an electrician who was assigned to work on a project at Marcal's Elmwood Park plant. Marcal had contracted with KEC to perform the electrical work associated with a major construction project that would expand Marcal's facilities and add new machinery to its existing plant. KEC, in turn, had subcontracted with ICR for its assistance with the installation and rigging of heavy electrical switchgear sections, which had to be hoisted to the second floor of a building on the site and moved to their point of installation. While the subcontract specifically delegated to ICR the rigging work involved in the project, KEC bore ultimate responsibility for the completion of this and all other aspects of the project pursuant to its contract with Marcal.

The two unions involved in the Marcal project — the IBEW representing the electricians, and the International Association of Bridge, Structural, and Ornamental Iron Workers ("Iron Workers' Union") representing the riggers — have had a written agreement in place since 1950 outlining the types of work that fall within the jurisdiction of electricians, and the types that are properly assigned to riggers, or iron workers. However, as the District Court noted, the work performed by electricians and riggers on a project like the one at the Marcal site can often overlap. The parties have conceded that the unions commonly encounter situations, often involving the moving and installation of heavy electrical equipment, in which the work at issue is not easily classified as falling within the exclusive jurisdiction of either electricians or riggers.

To deal with this kind of hybrid situation, and to avoid costly and time-consuming jurisdictional disputes, the two unions over time developed an informal practice of creating what they term "composite crews," using an equal number of workers from both unions, to work together to perform the discrete hybrid tasks. The parties refer to this practice as the "composite crew agreement," although no written agreement exists, and there is no specific understanding as to how tasks are to be performed or which union is in charge of overseeing the tasks. Because the hoisting and moving of the switchgears at the Marcal site involved both the movement and installation of electrical equipment, as well as the rigging and hoisting of that equipment, supervisors from the two companies working on the site determined that it fell into this category of hybrid work. Thus, based on the composite crew agreement, they formed a group of four workers — two from each union — to perform the discrete task of lifting and moving the three switchgear sections involved. This all occurred on August 7, 1998, the day of the accident.

Prior to that date, Marino had been performing electrical work for KEC at the Marcal site for several weeks. On August 7, Marino spent the morning performing work that was typically assigned to him as an electrician. Sometime before 11 a.m., Marino's KEC supervisor instructed him and another KEC electrician, Pat DiNardo, to work with two ICR riggers, Michael and Patrick Ruane, to move the switchgear sections to the point...