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Justice Anne Patterson. Photo by Carmen Natale/ALM[/caption] The New Jersey Supreme Court on Monday ruled that an employment contract limiting a worker's right to sue a third party after an injury is unenforceable. The court, in a unanimous ruling, said such waiver provisions run afoul of the public policy of protecting employees' rights and the plain language of the Workers' Compensation Act. Justice Anne Patterson, writing for the court, said that though an employee injured on the job might receive workers' compensation benefits, the law does not bar him or her from suing a third party. "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," Patterson said. The law, Patterson noted, does provide that any compensation that an injured plaintiff receives from a third party may be used to offset any lien from his or her employer's workers' compensation carrier. In this case, Kenilworth-based Schering-Plough—through successor Merck & Co.—had asked the court to overturn the Appellate Division's holding that summary judgment was properly denied in the case of a security guard who was injured at its facility and awarded $900,000.

The appeals court last August in Vitale v. Schering-Plough said the contract provision between plaintiff Philip Vitale, the guard, and his employer, AlliedBarton Security Services, violated public policy by contradicting the letter and spirit of the Workers’ Compensation Act because the guard was required as part of his employment to sign away his right to sue a third party. According to documents, Vitale was walking down a dark stairway at Schering’s Kenilworth facility in August 2009 when he tripped over a bag of snow-melting pellets left on the stairs. Vitale’s experts opined that his injuries—which included reduced mobility in his shoulder and arm, and cognitive difficulties—were permanent, but Schering’s experts said the injuries were minor and temporary.

Vitale received $45,552 in workers’ compensation benefits. Vitale filed suit against Schering, which merged with Merck & Co. in November 2009. After Vitale was awarded $900,000 in damages, plus additional payments for prejudgment interest, counsel fees and expenses, Schering appealed the denial of summary judgment. On appeal, Appellate Division Judges Jose Fuentes, Ellen Koblitz and Robert Gilson said exculpatory clauses are disfavored in the law and subject to close judicial scrutiny because they undermine the principles of the tort system by encouraging a lack of care. Such agreements are enforceable if they reflect the unequivocal expression of the party giving up its rights that the decision was made voluntarily and knowingly, but can’t be enforced where they are against public policy memorialized in legislation, administrative rules and judicial decisions. The Supreme Court, in affirming said, said the Schering provision "contravenes public policy." Vitale's attorney, Craig Rothenberg, said the ruling is an important one for workers who are employed for one company but assigned to work at another company's worksite. "It puts to rest a lot of questions," said Rothenberg, of the Clinton office of Rothenberg, Rubenstein, Berliner & Shinrod. Neither Schering's attorney, Gavin Rooney of Roseland's Lowenstein Sandler, nor Allied's attorney, Jay Gebauer of the Mount Laurel office of Fowler Hirtzel McNulty & Spaulding, returned a call seeking comment.