Resolution of the “Borrowed Employee” Issue under Galvao v. G.R. Robert Construction Co. is For the Jury, Not a Judge

Pantano v. New York Shipping Ass’n, ___ N.J. ___ (2023). Judge Sabatino wrote this 6-0 opinion, which involved “the application of the multi-factor test [the Court] announced in Galvao v. G.R. Robert Construction Co., 179 N.J. 462, 471-73 (2004), for evaluating whether a worker who negligently caused a plaintiff’s jobsite injury was a so-called ‘borrowed employee’ of the plaintiff’s own employer.” The issue that the Court faced in Pantano was “whether an employer’s vicarious liability under the borrowed-employee doctrine, as guided by the Galvao factors, is a question of law to be decided by the court or, conversely, a question of fact reserved for the jury.” Affirming the Appellate Division, the Court held that “the application of the multi-factor test — which can involve matters of disputed fact and witness credibility — is presumptively for a jury to determine. The court itself should not resolve the borrowed-employee issue unless the evidence concerning the factors is so one-sided that it warrants judgment in a moving party’s favor as a matter of law.”

After describing the particular facts in detail, and recapping Galvao, Judge Sabatino cited several prior Supreme Court cases, as well as decisions by the Court of Errors and Appeals, which had held that the borrowed employee issue was for a jury. “This pre-Galvao tradition of presumptively deeming borrowed-employee disputes as questions of fact for a jury makes sense. In many instances, the general employer’s witnesses and proofs will clash with those presented and relied upon by the opposing side. Factual disputes about control and business advantage can readily turn on the assessment of the credibility of competing witnesses. Juries are well-suited to making those assessments, as they are for a host of other factual disputes entrusted to them at trial.” Nothing in Galvao changed any of that.

Judge Sabatino carefully noted, however, that the Court’s ruling did not mandate that all cases go to a jury . If the evidence is one-sided, the issue can be decided on summary judgment or, at trial, by judgment as a matter of law under Rule 4:40-1. The employer had cited a number of cases in which summary judgment or judgment as a matter of law at trial had been granted, in support of the argument that the issue was for a court rather than a jury. Judge Sabatino noted that those cases were ones where “the facts were so one-sided as to warrant the court’s departure from the default rule that the jury normally decides the borrowed-employee question.” They represented exceptions to the rule, not an avulsive change in the rule itself.

The trial court had decided the borrowed employee issue itself rather than leaving it to the jury. That was error. Ordinarily, that would have required a new trial. But the parties agreed that they did not want a new trial. As a result, “the consequence of the denial of the Rule 4:40-1 motion is to reinstate the jury’s verdict” in favor of the plaintiff.