Vitale v. Schering-Plough Corp.

• Decision Date: 11 December 2017
• Docket Number: 078294,A–20 September Term 2016
• Citation: Vitale v. Schering-Plough Corp., 231 N.J. 234, 174 A.3d 973 (N.J. 2017)
• Parties: Philip VITALE, Plaintiff–Respondent, v. SCHERING–PLOUGH CORPORATION, Defendant–Appellant.
• Court: New Jersey Supreme Court

231 N.J. 234

174 A.3d 973

Philip VITALE, Plaintiff–Respondent,

v.SCHERING–PLOUGH CORPORATION, Defendant–Appellant.

A–20 September Term 2016

078294

Supreme Court of New Jersey.

Argued September 26, 2017

Decided December 11, 2017

Gavin J. Rooney argued the cause for appellant(Lowenstein Sandler, attorneys; Douglas S. Eakeley, of counsel, and Gavin J. Rooney and Joseph A. Fischetti, on the briefs).

Craig M. Rothenberg argued the cause for respondent(Rothenberg, Rubenstein, Berliner & Shinrod, attorneys; Craig M. Rothenberg, of counsel and on the briefs, and Elizabeth H. Hamlin, on the briefs).

Jay A. Gebauer argued the cause for amicus curiaeAllied Barton Security Services, LLC(Fowler, Hirtzel, McNulty & Spaulding, attorneys; Jay A. Gebauer and Quinn M. McCusker, on the brief).

Nancy Erika Smith argued the cause for amicus curiaeNew Jersey Association for Justice(Smith Mullin, attorneys; Nancy Erika Smith, of counsel and on the brief, and Virginia A. Pallotto, on the brief).

Shalom D. Stone submitted a brief on behalf of amicus curiae New Jersey Civil Justice Institute (Stone Conroy, attorneys).

Richard M. Schall and Bennett D. Zurofsky submitted a brief on behalf of amici curiae National Employment Lawyers Association of New Jersey and New Jersey Industrial Union Council(Schall & Barasch, attorneys for National Employment Lawyers Association of New Jersey and Bennett D. Zurofsky, attorney for National Employment Lawyers Association of New Jersey and New Jersey Industrial Union Council).

JUSTICE PATTERSONdelivered the opinion of the Court.

In this appeal, the Court considers an employee's agreement at the inception of his employment to prospectively waive third-party claims against his employer's customers, in the event that he were to sustain injuries in a workplace accident at a customer's facility.

PlaintiffPhilip Vitale was hired by Allied Barton Security Services (Allied Barton) as a security guard.When it hired Vitale, Allied Barton required him to execute an agreement entitled "Worker's Comp Disclaimer"(Disclaimer) as a condition of his employment.In the Disclaimer, Vitale agreed to "waive and forever release any and all rights" that he may have had 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."

Allied Barton assigned Vitale to provide security services at a facility operated by its customer, defendantSchering–Plough Corporation(Schering–Plough).While on duty at that facility, Vitale was seriously injured in an accident.After recovering benefits under the Workers' Compensation Act,N.J.S.A. 34:15–1 to -146, Vitale filed a third-party action, alleging that Schering–Plough negligently maintained its premises and that its negligence caused his injuries.Schering–Plough moved for summary judgment, asserting that Vitale waived his negligence claims against Schering–Plough when he executed the Disclaimer.The trial court held that the Disclaimer was void as contrary to public policy and denied Schering–Plough's motion; the matter proceeded to trial.A jury returned a verdict in Vitale's favor and awarded substantial damages.

An Appellate Divisionpanel affirmed the trial court's denial of summary judgment and the jury's determination of damages.The panel, however, reversed the trial court's determination to bar the jury from considering Vitale's negligence and allocating a percentage of fault to him and remanded for a new trial limited to the issue of liability.We granted certification limited to the question of the Disclaimer's enforceability.

We hold that the Disclaimer contravenes public policy as expressed in two provisions of the Workers' Compensation Act.First, N.J.S.A. 34:15–40(section 40) provides that an employee's right to workers' compensation benefits does not preclude his or her assertion of common-law personal-injury or wrongful-death claims against a liable third party, and that the employer's workers' compensation carrier may be granted a lien against the employee's recovery in the third-party claim.By virtue of its waiver of any third-party action, the Disclaimer would alter the balancing of interests of the employer, the employee, and a potentially liable party that the Legislature envisioned when it enacted that provision.

Second, subject to an exception that is inapplicable here, N.J.S.A. 34:15–39(section 39) expressly declares any "agreement, composition, or release of damages made before the happening of any accident" to be contrary to public policy.Section 39 is not limited to agreements to waive workers' compensation benefits; it governs Vitale's pre-accident agreement to forego any third-party claim against Schering–Plough in the event that he sustained a workplace injury on its premises.Section 39's plain language voids the Disclaimer in this case.

Accordingly, we affirm as modified the Appellate Division's judgment, and remand to the trial court for a new trial on the issue of liability.

I.

We derive our account of the facts from the summary judgment record presented to the trial court.

Pursuant to the terms of a Master Vendor Agreement between Allied Barton and Schering–Plough, effective July 27, 2002, Allied Barton agreed to assign supervisory and general security officers to provide security services at Schering–Plough facilities.Under that agreement, the security officers would be Allied Barton employees but would report to work at Schering–Plough.

In August or September 2005, Allied Barton hired Vitale to work as a security officer.On September 27, 2005, Vitale signed the Disclaimer, which provided:

I understand that state Workers' Compensationstatutes cover work-related injuries that may be sustained by me.If I am injured on the job, I understand that I am required to notify my manager immediately.The manager will inform me of my state's Workers' Compensation law as it pertains to seeking medical treatment.This is to assure that reasonable medical treatment for an injury will be paid for by Allied's Workers' Compensation insurance.

As a result, and in consideration of Allied Security offering me employment, I hereby waive and forever release any and all rights I may have to:

—make a claim, or

—commence a lawsuit, or

—recover damages or lossesfrom or against any customer (and the employees of any customer) of Allied Security to which I may be assigned, arising from or related to injuries which are covered under the Workers' Compensation statutes.

Allied Barton assigned Vitale to Schering–Plough's Kenilworth facility.Between 2005 and 2008, Vitale worked as a security officer.Vitale described his job duties in the position as "[o]bserving, reporting, holding a post, touring the facility or the post area," and monitoring security cameras.In 2008, Allied Barton promoted Vitale to the position of field manager, with responsibilities to train and supervise other Allied Barton officers at the Schering–Plough facility.

One of Vitale's responsibilities as a field manager was to ensure that the security officers under his supervision had appropriate uniforms.Beginning in 2008, the security officers' uniforms were stored in the basement of the main guardhouse of the Kenilworth facility.On ten to fifteen occasions, Vitale descended the stairs to retrieve uniforms for the officers.

While on duty on August 31, 2009, Vitale fell down the stairs that led to the guardhouse basement.Another security officer turned on the light in the stairwell and saw Vitale "laid out at the bottom of the stairs."The officer who found Vitale attributed his fall to the "cluttered" condition of the entrance to the stairwell.Vitale sustained injuries to his head, neck, shoulder, and lower back as a result of the accident.

Vitale filed a claim pursuant to the Workers' Compensation Act in the New Jersey Department of Labor and Workforce Development, Division of Workers' Compensation.In a settlement agreement incorporated in an Order Approving Settlement dated March 7, 2011, Vitale and Allied Barton resolved the workers' compensation claim.Vitale, who had received temporary disability benefits at a rate of $549.92 per week for thirty weeks, was awarded "30% of partial total [disability]," allocated among lower back, shoulder, and neurological injuries, for 180 weeks at a rate of $252.90 per week.Vitale did not return to his employment with Allied Barton.

Vitale then filed this action.He asserted that Schering–Plough owed him a duty of care as a business invitee working on its premises, that he was injured because Schering–Plough had negligently maintained its facility and failed to warn him of a dangerous condition, and that he was entitled to compensatory damages.

After obtaining a copy of the Disclaimer in discovery, Schering–Plough moved before the trial court for summary judgment pursuant to Rule 4:46–2(c).It argued that Vitale's negligence claims were barred by the Disclaimer.The trial court denied Schering–Plough's summary judgment motion.The court reasoned that a ruling barring Vitale's claims against Schering–Plough would contravene public policy.

The case was tried before a jury.The trial court granted Vitale's motion for a directed verdict on the question of his comparative negligence.The court did not permit the jury to consider whether Vitale was negligent in descending the stairs without turning on the stairwell light, or to allocate fault to him pursuant to the Comparative Negligence Act, N.J.S.A. 2A:15–5.1 to -5.8.The jury determined that Schering–Plough was negligent and that its negligence was a proximate cause of Vitale's injuries and awarded $900,000 in compensatory damages.The trial court denied Schering–Plough's motion for a new trial.

Schering–Plough appealed.An Appellate Divisionpanel affirmed in part and reversed in part the trial court's judgment.Vitale v. Schering–Plough Corp., 447 N.J. Super. 98, 107, 146 A.3d 162(App. Div.2016...