Key Takeaways

• In an unpublished decision, the New Jersey Appellate Division found that the petitioner sustained a compensable injury when she fell in a parking lot owned by  the landlord of a shopping center.

• The court repeatedly cited the employer’s “use” of the parking lot in its reasoning, despite prior case law indicating employer liability only when the employer “owns or controls” the lot, or when the employer directs its employees to park in a specific area of  the lot.

• Employers must be aware that the extent of their use and control of a landlord-owned parking lot will weigh heavily in determining whether a fall in the parking lot is compensable.

On September 7, 2021, the New Jersey Appellate Division released an unpublished opinion indicating its willingness to expand workers’ compensation liability in parking lot cases. Although the opinion is unpublished and therefore not binding, some workers’ compensation judges have begun citing this opinion when confronted with parking lot cases.

With the onset of winter, employers face ice and snow in parking lots outside the place of business. Thus, it is extremely important to understand the current trend of the Appellate Division when analyzing whether or not a parking lot injury is compensable in the workers’ compensation system.

In the case, the petitioner, a seventy-year-old employee who had worked for the employer for more than thirty years, fell in a pothole in the parking lot. The parking lot was owned by the landlord of the shopping center, and it abutted the side entrance of the business. Per the lease, the landlord was responsible for maintaining the common areas, including the parking lot, snow removal, cleaning, sweeping, and patching.

Ten months prior to the fall, the employer and the landlord amended the lease agreement to allow the employer to repave the parking lot. The employer’s general counsel testified that the parties entered into this amendment because the landlord did not want to deal with getting approvals from the planning board.

The petitioner fell on the side of the employer’s business near a cabana that employees used for breaks. The employer also used this side lot to accept deliveries from vendors and to store unused shopping carts.

Following a trial, the workers’ compensation judge found that the injury was not compensable and dismissed the case. The judge found that the fall did not occur (1) in an area under the employer’s control nor (2) in an area designated for employees to park.

The Appellate Division reversed and found the injury compensable. In reaching its decision, the Appellate Division cited the following factors:

• The parking lot was used by the employer’s customers for parking.
• The parking lot was used by the employer’s vendors for making deliveries.
• The parking lot contained a cabana where the employees could take coffee/smoke breaks.
• The employer regularly stored shopping carts in the parking lot.
• Finally, and most importantly, the lease amendment allowed the employer to exercise control over the parking lot in the form of repaving the lot.

This opinion indicates that the Appellate Division is willing to extend liability for employers in lots owned by landlords. The court somewhat conflated the “use” versus “control” analysis in the opinion. The opinion harps on all of the different ways the employer used the lot. However, the lynch pin factor, from a defense perspective, must be the lease amendment, which allowed the employer to repave the lot. This shows a form of control. This factor will allow employers to distinguish this opinion from future parking lot cases.

The opinion relies on a very specific and unique set of facts, as do many parking lot cases. As outlined above, arguments can be made to distinguish this opinion from others. However, it is important to recognize a clear shift in the Appellate Division’s stance on private enterprises and the parking lots where their employees are parking. This opinion shows that the court is moving from a “control” analysis closer and closer to a “use” analysis. The opinion is not binding, but judges have already begun citing the opinion when considering these cases. Therefore, it is important to keep this case and its factors in mind when making compensability decisions for parking lot injuries.

If you have any questions about how this recent Appellate Division decision may impact your business or if you have a specific scenario you would like to discuss, please contact:

• Noah L. Dennison
• Esther F. Omoloyin
• Damon M. Gruber
• Sean J. McKinley

Or another member of the firm’s Workers’ Compensation team.