Geaney: Key Legislation in 2022

Friday, January 14, 2022 | 0

In the first few days of 2022, two major legislative developments have significantly impacted workers’ compensation law. The legislation effectively repealing the Supreme Court decision in Hersh v. County of Morris will have a long-term impact on workers’ compensation in New Jersey; the resumption of the public health emergency will likely have only a short-term impact.

Governor signs S771

Gov. Phil Murphy signed S771 on Jan. 10, adding the following new language in N.J.S.A. 34: 15-36 in relation to compensability of accidents in parking lots:

Employment shall also be deemed to commence, if an employer provides or designates a parking area for use by an employee, when an employee arrives at the parking area prior to reporting for work and shall terminate when an employee leaves the parking area at the end of a work period; provided that, if the site of the parking area is separate from the place of employment, an employee shall be deemed to be in the course of employment while the employee travels directly from the parking area to the place of employment prior to reporting for work and while the employee travels directly from the place of employment to the parking area at the end of a work period.

This new provision was a response to the Hersh case, which involved an injury to an employee of the County of Morris, which rented space in a private garage for 65 employees. The decision in Hersh created a great deal of controversy and discussion. 

The facts were that Mrs. Hersh could not park in the county building next to her office because she lacked seniority, so she parked in the private garage in one of the 65 leased spaces. She then walked a half block to Washington Street. While crossing the street, she was struck and was seriously injured by a vehicle that had run a red light.

The petitioner’s injuries were found not compensable because the county did not own or control the garage. The Supreme Court found that the county did not derive a direct business interest from paying for employees to park in the private garage and noted that the accident occurred in a public street. The court also commented that there was also no added or special hazard in crossing the public street.

The new legislation is significant in the following respects:

• It may not matter any longer that the employer does not own or control the parking lot, particularly if the parking area is not adjacent to the employer’s place of business.
• It will also not matter that the injury occurred while the employee was walking on public property on the way to the employer’s place of business from a lot designated or provided by the employer. This accident is now compensable.
• What matters is whether the employer “provides or designates a parking area for use by an employee.”

In examining this bolded phrase more closely, one can say that the word “designates” is fairly clear in meaning. A parking area marked off for one employer’s use for its employees will clearly fall within this definition. But that has been the law for a long time. There was no need for a new law to tell us the designation of a parking area by an employer means controlling parking. 

The problematic word is the verb “provides.” What is the legal definition of “provides?” Well, “provides” is not really a word with a legal definition at all. The dictionary definition is “makes available for use.” Clearly, that applies to the situation in Hersh because the county leased and, therefore, provided parking. But many employers lease space in a building and do not designate any specific parking area alongside the place of employment. Yet there may be ample parking. When asked by employees or job applicants about parking, such employers may respond that parking is provided, simply meaning that employees will not have to pay for it. 

Does an employer “provide” parking when the employer makes sure in its lease that its employees have access to parking lots at no cost to the employee, even if the employer does not own the lot or control the lot?

What if judges interpret the word “provided” in this expansive way? Then virtually all injuries in parking lots will be found compensable now, whether the employer is just a tenant in the building or not. That results in a complete reversal of the 1979 amendments. Only injuries occurring to employees who park in public streets will then be found noncompensable. Such a reading would clearly conflict with the most important paragraph in N.J.S.A 34:15-36 in respect to commencement of employment:

Employment shall be deemed to commence when an employee arrives at the employer’s place of employment to report for work and shall terminate when the employee leaves the employer’s place of employment, excluding areas not under the control of the employer …” 

This language is the heart of the so-called “premises rule.” The new parking language did not remove the 1979 definition of commencement of employment. It is still there. Control or the absence of control is essential to the definition. The key language is “excluding areas not under the control of the employer.” 

How does one square this language about areas not under the control of the employer with the language in the new law about an employer that provides a parking area? Does the employer have to argue that the landlord, not the tenant, provides the parking area? If that is the argument, the counterargument will be that all employers that lease space pay for common area maintenance charges and, therefore, indirectly provide parking. Using the wrong word in a statute can be like pulling on a thread.

In my opinion, S771 conflicts with the premises rule. The word “provides” is the problematic word that will lead to a plethora of appeals. Counsel for petitioners injured in parking lots where space is leased are going to argue for broad interpretation of “provides,” and employers are going to argue that the law still excludes areas not under the control of the employer. 

One does not need a crystal ball to predict that the Supreme Court ironically will someday have to resolve an inherent conflict created by a legislative response to negate the Supreme Court’s own 2014 decision. 

My own guess is that the sponsors of this new law were thinking of how to counter the result in Hersh, which involved off-site parking leased by the employer. If the law had just focused on off-site parking areas, there would not likely be a wave of future litigation over the meaning of “provides.” 

One other point is worth mentioning about S771, and it is a fairly common problem encountered with workers’ compensation legislation. Just as with the passage of the "hand and foot" bill two years ago, this legislation fails to make clear which cases will be covered. By stating, “this law shall take effect immediately,” the legislation did not answer whether the new law applies only to cases that are filed after Jan. 10, 2022, or applies to all cases presently pending in the division as of that date.

Resumption of public health emergency

Executive Order 280 signed by Murphy this week reinstates a public health emergency in New Jersey. By way of background, Murphy signed S2380 on Sept. 14, 2021, defining certain essential workers who contracted COVID-19 at work. The law created a rebuttable presumption that the virus was work-related for such essential employees.  The essential employee law specifically referenced the contraction of COVID-19 during the public health emergency.

In June 2021, Murphy declared that the public health emergency had ended. He did not mention anything about the end of the legal presumption, but many practitioners, including me, reasoned that there was no longer a presumption, since there was no longer a public health emergency. This week’s renewal of the public health emergency will certainly be viewed by judges of compensation to mean that the presumption of compensability again prevails.

As readers know, this legal presumption shifts the burden of proof to the employer to disprove that the virus was contracted at work. There is, however, no presumption of impairment. The burden of proof remains on the injured employee to prove a compensable impairment for purposes of obtaining an award of permanent partial or total disability benefits.

John H. Geaney is an attorney, executive committee member and shareholder with Capehart Scatchard, a defense law firm in New Jersey. This post appears with permission from Geaney's New Jersey Workers' Comp Blog.