NJ Supreme Court clarifies 'authorized vehicle rule' for workers' compensation claims
Review the four rules governing when an employee is ‘in the course of employment’ under New Jersey’s workers’ comp laws.
The New Jersey Supreme Court sided with an employee in a workers’ compensation appeal, finding that his car accident occurred “in the course of employment” under the state’s “authorized vehicle rule,” since he was conducting business expressly authorized by his employer.
Henry Keim was employed by Above All Termite & Pest Control as a salaried employee with a company vehicle he took home every night. Michael Zummo, the owner of Above All, instructed employees not to keep large quantities of pesticides and supplies in their vehicles. However, employees were expected to use their work vehicles to travel directly to the remote job site if they had enough supplies. If they needed supplies, the employees would go to Above All’s shop to restock, according to the opinion filed Nov. 21, 2023.
Keim was seriously injured in an early morning motor vehicle accident in July 2020 on his way to the shop to get supplies. He filed a workers’ compensation claim, but Above All moved to dismiss, contending that Keim’s injuries “did not arise out of and in the course of employment,” according to the opinion.
A workers’ compensation judge sided with Above All and dismissed the petition with prejudice, holding that Keim’s injuries were not compensable under the Workers’ Compensation Act (WCA) because “he was not acting within the course and scope of his employment at the time of the accident,” the opinion said.
The Appellate Division disagreed and held that Keim’s injuries were compensable under the authorized operation of a vehicle exception.
At oral arguments before the New Jersey Supreme Court, counsel for Above All, Anne Hammil-Pasqua of Capehart & Scatchard, argued that the WCA creates a bright-line “coming and going” rule, now known as the “premises rule,” which deems injuries sustained while commuting noncompensable.
“Above All contends that the Appellate Division’s judgment abrogated the ‘premises rule,’ and that Keim’s injuries are not compensable under the Act because he was on routine travel to replenish work supplies at the shop while commuting to his place of employment,” Justice Douglas M. Fasciale wrote for the court.
Counsel for Keim, April M. Gilmore of The Epstein Law Firm, countered that her client was operating an ”employer-authorized vehicle” on business that was “expressly authorized and directed by his employer.” Richard B. Rubenstein of Rubenstein, Berliner & Shinrod appeared for amicus curiae New Jersey Advisory Council on Safety and Health in support of Keim’s position.
Fasciale noted that, before 1979, it was “broad statutory language” that defined compensable accidents from those which arose out of and in the course of employment. The courts developed the “going and coming rule” to distinguish between compensable and noncompensable incidents, according to the opinion. In 1979, the WCA was amended by the legislature to define when employment under the act begins and ends each day.
Those amendments laid out four rules governing when an employee is “in the course of employment” under the WCA: The premises rule, the special mission rule, the paid travel time rule and the authorized vehicle rule. Keim argued that his claim fell under the authorized vehicle rule.
Fasciale stated that the authorized vehicle rule does not always apply to an employee driving a vehicle authorized by an employer. For example, the rule does not apply when an employee is commuting to work.
“The latter three rules have sometimes been called ‘exceptions’ to the ‘premises rule,’” Fasciale said. “We conclude, however, that those so-called ‘exceptions’ are better understood as distinct rules that define commencement and termination of employment in different scenarios.
“Based on the plain language of the ‘authorized vehicle rule’ in N.J.S.A. 34:15-36, we hold that an employee is ‘in the course of employment’ when the employer authorizes a vehicle for operation by the employee, and the employee’s operation of that identified vehicle is for business expressly authorized by the employer,” he added.
As for Keim, Fasciale held that he was in the course of employment when he was injured while heading to the shop to replenish supplies. That business was expressly identified and authorized by Above All, according to the opinion.
“We are not persuaded that the passive, permissive approach to replenishment taken by the employer here — whereby employees determined for themselves whether and when to visit the shop on an as needed basis — changes the analysis,” Fasciale said. “The ‘authorized vehicle rule’ merely requires an employer’s authorization.”
Fasciale said that this stands in contrast to the more pointed requirements of the special mission rule, which would apply to an employee directly performing ”duties assigned or directed by the employer.”
“The clear difference in language indicates that ‘on business authorized’ does not mean exactly ‘duties assigned or directed by the employer,’” Fasciale said. “In short, an employer can authorize an employee to do something, here, replenish supplies as needed, without expressly assigning or directing that employee to perform those specific duties.”
Fasciale said the court did not consider whether any other rules established by N.J.S.A. 34:15-36 are applicable to this case.
The unanimous opinion was joined by Chief Justice Stuart Rabner, and Justices Anne M. Patterson, Lee A. Solomon, Fabiana Pierre-Louis, Rachel Wainer Apter and Michael Noriega.
Gilmore, counsel for Keim, said that Fasciale’s opinion was well-reasoned and provided much-needed clarification of N.J.S.A. 34:15-36′s definition of employment, which has been the subject of a considerable amount of caselaw.
“The Supreme Court correctly read the statute to provide four distinct rules, rather than one rule and three exceptions — that define when an employee is in the course of his or her employment — and when employment commences and terminates in different scenarios,” Gilmore said. “I am also grateful that I had the benefit of the knowledge and compassion Rick Rubenstein brought to the table on behalf of amicus N.J. Counsel of Safety and Health.”
Hammil-Pasqua, counsel for Above All, said that an important takeaway is that the “authorized vehicle rule” does not constitute a blanket coverage for accidents involving the operation of an authorized vehicle.
“The Supreme Court made it abundantly clear that this rule ‘does not categorically apply when an employee is merely commuting to work in either an authorized personal or work vehicle,’” Hammil-Pasqua said. “Rather, it hinges on the factual inquiry of whether the employee was engaged in business activities sanctioned by the employer. The ruling upheld the strict standards for the limited application of this rule, confirming that it only applies in narrow circumstances.”
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