Injured New Jersey Workers May Not Sue for Workers’ Compensation
In August 2012, the New Jersey Supreme Court ruled that workers’ compensation carriers that refuse to pay out on valid claims cannot be sued by injured workers to whom they owe money.
In 1995, Wade Stancil was injured while working at Orient Originals, a carpet warehouse, and received workers’ compensation benefits from compensation carrier ACE USA (ACE) for his injuries. After a 2006 trial, the compensation court found Stancil was completely disabled and in 2007, Stancil filed a motion to compel ACE to pay his outstanding medical bills. The compensation court ordered ACE to pay and warned ACE about any future violations of its order.
Six weeks later, ACE had still not paid. Though the court re-issued its order and awarded Stancil attorney’s fees, the court noted its limited power in enforcing its orders even through contempt rulings. Stancil had exhausted his administrative remedies so the compensation court recommended that he seek help in the New Jersey Superior Court. His doctor noted that Stancil’s condition worsened, requiring more surgery and psychiatric treatments, specifically because of ACE’s failure to pay.
New Jersey’s Workers’ Compensation Act allows employees injured within the scope of their employment to recover the cost of their medical bills and receive lost wages and disability benefits. Because New Jersey is a “no fault” workers’ compensation state, even workers who partially caused their own injuries can receive workers’ compensation benefits. The system is a form of insurance and in exchange for these benefits, an employee forfeits the right to file a civil lawsuit against their employer.
Because the compensation court is the only remedy for injured workers, the New Jersey Supreme Court had to determine in Mr. Stancil’s case whether an injured worker could sue his employer’s compensation carrier for the pain and suffering resulting from the carrier’s willful failure to pay for medical treatment and other medical services. The court ruled that an injured employee could not sue because of the structure of New Jersey’s workers’ compensation statutes.
The court’s reasoning was that the workers’ compensation system was designed to give workers a remedy outside a normal civil tort lawsuit and that allowing a common law lawsuit in Superior Court would completely undermine the system. Moreover, the court said that when the New Jersey legislature amended the Workers’ Compensation Act in 2008, it rejected a proposal to allow a remedy in the Superior Court, but gave compensation courts the contempt power to compel compliance.
The 2008 amendment gave compensation courts the authority to issue contempt orders for carriers refusing to pay and then ask the Superior Court to enforce the order. Moreover, the 2008 amendment allowed compensation courts to assess carriers for costs and interest plus fines for unreasonable delay.
The New Jersey Supreme Court felt the 2008 amendment provided the appropriate mechanism for relief without undermining the state’s workers’ compensation system. At the time of Mr. Stancil’s lawsuit, the changes had yet to be made. He now has an additional avenue of relief against ACE to ensure it makes the payments previously ordered.
The ruling in Wade Stancil v. ACE USA essentially gives workers’ compensation carriers immunity from lawsuits when they choose not to pay out on claims. However, the ruling is a victory for injured workers because it highlights the remedy already available within the workers’ compensation system. Moreover, it will save workers trying to enforce a court order to pay the time and money of seeking relief through a civil lawsuit.
If you or a loved one has been injured on the job and is seeking compensation for medical expenses, contact an experienced workers’ compensation attorney to discuss your situation and your options.