October 11, 2023

New Jersey Supreme Court Holds that Multi-Factor Test in Determining Whether an Employee was a “Borrowed” or “Special” Employee is Presumptively an Issue for the Jury to Decide

The case of Phillip Pantano v. New York Shipping Association arose out of a workplace injury involving plaintiff Pantano who was an employee of Container Services of New Jersey (CSNJ).  Pantano was injured while attempting to move a piece of industrial equipment.  Co-worker Lawrence Giamella, who was also working on the site that day, tried to help plaintiff move the equipment with a forklift, and the plaintiff’s foot was crushed in the process.  The core issue in this case was whether the co-worker, Giamella, was working for CSNJ, Marine Transport (MT), or both.

Plaintiff collected workers’ compensation benefits from his employer, CSNJ.  However, he brought suit against Marine Transport (MT), a company that was related to CSNJ.  These two companies were owned by the same person.  CSNJ was in the business of repairing shipping equipment such as containers and refrigeration systems.  MT was in the trucking business, transporting containers from Port Newark to their inland destinations, although MT’s employees regularly perform mechanical work for CSNJ’s customers.  At times, CSNJ's unionized employees worked on MT’s payroll on the weekends.  All workers at the shared workplace were supervised by a manager paid by CSNJ.

The trial court granted CSNJ summary judgment pursuant to the exclusive remedy provision of the Workers’ Compensation Act.  MT also moved for summary judgment, arguing that it was not the co-worker’s employer and was, therefore, not vicariously liable for the co-worker’s negligence because the co-worker was an employee of CSNJ.  Although the co-worker was on MT’s payroll, MT raised the affirmative defense that the co-worker was a “borrowed” or “special” employee working for CSNJ at the time of the accident.  The trial judge denied MT’s motion.  The case proceeded to trial where the jury awarded the plaintiff compensation.

After trial, however, the trial judge vacated the verdict and dismissed MT from the case, concluding that the co-worker was a “borrowed” employee working for CSNJ when the accident occurred.  The Appellate Division reversed and reinstated the jury verdict.  The Supreme Court granted MT’s petition for certification limited to the issue of whether the court or the jury should determine the “borrowed” employee issue.

The law in New Jersey is that in some instances, a worker may be serving as a dual employee of both the “general employer” and the “special employer.”  The special employer “borrows” a worker from the general employer.  A situation can arise where general and special employers both retain some control over a project, and both stand to reap an economic benefit from it.  In light of those circumstances, allocating liability between the responsible parties might be appropriate, as it would in any matter in which two or more parties are responsible for a plaintiff’s injuries.

The Supreme Court held that the multi-factor test enunciated in Galvao v. G.R. Robert Construction Co., 179 N.J. 462 (2004) is “presumptively for a jury to determine.”  The Supreme Court now instructs that the trial courts should not resolve the “borrowed” employee issue unless the evidence concerning the factors are so one-sided that it warrants judgment in a moving paper’s favor as a matter of law.  The evidence in the Pantano case was not so one-sided and, therefore, the trial court incorrectly granted defendant’s motion and deemed the worker who caused the accident a “borrowed” employee of plaintiff’s own employer.

The factors that the jury must use to decide whether a negligent worker was a “borrowed” employee sufficient to find the general employer of the negligent worker vicariously liable to a third-party are as follows:  (1) Whether the employer exercised control over the negligent co-worker through evidence of “on the spot” or “on the job” control, the method of payment (i.e., who paid the co-worker), who furnished the equipment, and who had the right of termination; and (2) if the general employer is found to have control, whether the worker was acting in furtherance of the general employer’s business.

The Supreme Court concluded that the evidence was not sufficiently lopsided to conclude as a matter of law that MT relinquished its control over the co-worker once he started performing tasks for CSNJ at the jobsite.  This is because MT paid the co-worker, and MT failed to provide the co-worker with legally required forklift training.  Moreover, the trial court erred in concluding as a matter of law that the co-worker’s activities at the jobsite were not in furtherance of MT’s business interests.  MT’s website touted to its customers that they could obtain repair services arranged by MT but performed by CSNJ mechanics.  Such an advertisement could support a finding that such activities were within MT’s general contemplation.  The fact that CSNJ received the direct payments for those repair services did not eliminate the potential business advantage gained by MT in attracting clientele.

Accordingly, the Galvao factors pointed in both directions.  It was, therefore, improper for the trial court to decide a dispositive motion in MT’s favor with such a mixed record.  The motion should have been denied and the jury should have been tasked with determining whether the co-worker was a “borrowed” employee.

If you have any questions about this matter, please contact Michael D. Noblett, Esq. at mnoblett@c-wlaw.com  or (848) 229-3300.


The information in this article is provided for general informational purposes only and may not reflect the current law in your jurisdiction.  By reading this article, you understand that there is no attorney-client relationship between you and Cipriani & Werner, P.C. or any of our attorneys.  No information contained in this article should be construed as legal advice from Cipriani & Werner, P.C. or the individual authors.