Samuel v Petainer
Attorneys and Parties
Brief Summary
Personal injury arising from a kombucha keg explosion; whether Workers' Compensation exclusivity and the special employer doctrine bar tort claims and third-party contribution/indemnification.
The Supreme Court (Kings County) denied GT's Living Foods, LLC (GTLF)'s motion for summary judgment dismissing the amended complaint and all cross-claims against it.
The Appellate Division modified by granting summary judgment to GTLF dismissing the amended complaint and all cross-claims for contribution and common-law indemnification against it; otherwise the order was affirmed.
GTLF established prima facie that it was the plaintiff’s special employer, barring the negligence action due to Workers' Compensation exclusivity, and the record showed no 'grave injury' to sustain third-party contribution or common-law indemnification under Workers' Compensation Law § 11 [limits employer liability to workers’ compensation benefits and allows third-party indemnification/contribution only if the employee sustained a statutorily defined 'grave injury'].
Background
In October 2019, Ori Samuel was injured when a plastic keg containing kombucha exploded at a storage facility owned by SG Storage Management, LLC doing business as (d/b/a) Gotham Mini Storage, which was leased by GT's Living Foods, LLC (GTLF). Samuel had interviewed with and was hired and trained by GTLF in mid-2018 as a brand ambassador. In 2019, GTLF entered an Employer of Record (EOR) agreement titled 'Employer of Record Payrolling Managed Services Agreement' with Atrium Payroll Services, LLC (Atrium), under which Atrium became the 'employer of record' for certain GTLF 'Referred Associates' (including Samuel), handling payroll, workers’ compensation benefits, and work-related claims, funded by GTLF. Despite becoming an Atrium employee on paper in July 2019, Samuel received all assignments, direction, and supervision from GTLF, including the directive on the accident date to retrieve items from the storage unit for a GTLF event. The Workers' Compensation Board (WCB) later issued a decision requiring Atrium to pay awards to Samuel. Samuel sued Petainer, Petainer Manufacturing USA, Inc., Gotham, G3 Enterprises, Inc., and later added GTLF, alleging personal injuries from the keg explosion.
Lower Court Decision
The Supreme Court, Kings County, denied GTLF’s motion for summary judgment seeking dismissal of the amended complaint and all cross-claims against it.
Appellate Division Reversal
The Appellate Division held that GTLF established, through the EOR agreement, deposition testimony, and its CEO’s affidavit, that GTLF retained control over the manner, details, and results of Samuel’s work, making GTLF his special employer. Because Samuel received Workers’ Compensation benefits from the general employer (Atrium), the negligence action against the special employer (GTLF) was barred. The court also held that the cross-claims for contribution and common-law indemnification against GTLF were barred because the injuries identified in Samuel’s bill of particulars and deposition did not constitute a 'grave injury' under Workers' Compensation Law § 11 [limits employer liability to workers’ compensation benefits and allows third-party indemnification/contribution only if the employee sustained a statutorily defined 'grave injury']. The order was modified to grant those branches of GTLF’s motion; as modified, it was otherwise affirmed.
Legal Significance
Reaffirms that a host entity can be deemed a 'special employer' despite an Employer of Record arrangement where the host directs and controls the employee’s work; Workers’ Compensation exclusivity will bar tort claims against the special employer. Also underscores that third-party contribution and common-law indemnification claims against an employer are barred absent a statutory 'grave injury' under Workers' Compensation Law § 11.
Employer-of-record/payroll arrangements do not defeat special employer status when the host company retains control over the employee’s work; absent a 'grave injury,' Workers’ Compensation Law § 11 forecloses third-party contribution and common-law indemnification against the employer.