New York Law Review

Fung v. Japan Airlines Co., Ltd., 8 N.Y.3d 351 (2007): Clarifying the Scope of Workers’ Compensation Exclusivity

Published by

The New York Law Review

in

Fung v. Japan Airlines Co., Ltd., 8 N.Y.3d 351 (2007)

The exclusive remedy provisions of the Workers’ Compensation Law do not automatically extend to a managing agent of an employer unless there is a sufficient working relationship between the agent and the employee to establish a special employment relationship.

Summary

Brent Fung, an electrician for the Port Authority, sued Japan Airlines Management Corp. (JAMC), the managing agent of the building where he worked, and Aero Snow Removal Corp. after slipping on ice in the parking lot. The Court of Appeals addressed whether JAMC, as a managing agent, could invoke the exclusive remedy provisions of the Workers’ Compensation Law, barring Fung’s negligence claim. The Court held that JAMC could not claim this protection because there was no demonstrated working relationship between JAMC and Fung that would establish JAMC as Fung’s special employer. The Court also affirmed the dismissal of the claim against Aero, finding that Aero did not owe Fung a duty of care.

Facts

Brent Fung, an electrician employed by the Port Authority, sustained injuries after slipping on ice in the parking lot of Building 14 at John F. Kennedy International Airport. The Port Authority owned the building and leased it to JAMC, who then subleased a portion of it back to the Port Authority. JAMC contracted with Aero for snow removal services, including plowing and ice/snow control services upon request. The lease agreement stipulated that JAMC was not an agent or representative of the Port Authority. Fung later testified he had complained about inadequate lighting in the parking lot. JAMC’s contract with Aero stated JAMC acted “As Agents [sic] for the Port Authority.”

Procedural History

Fung sued JAMC and Aero, alleging negligence. JAMC then brought a third-party action against Aero and a fourth-party action against the Port Authority for indemnification. Aero also moved for summary judgment to dismiss the claims against them. The Supreme Court denied JAMC and Aero’s motions, but the Appellate Division reversed, dismissing the claims against both, finding JAMC was acting as the Port Authority’s managing agent and therefore protected by workers’ compensation exclusivity, and that Aero owed no duty to Fung. The Court of Appeals granted leave to appeal.

Issue(s)

1. Whether JAMC, as a managing agent of the Port Authority, could invoke the exclusive remedy provisions of the Workers’ Compensation Law to bar a negligence claim by a Port Authority employee.

2. Whether Aero Snow Removal Corp. owed a duty of care to Fung, a non-contracting third party.

Holding

1. No, because there was no evidence of a working relationship between JAMC and Fung sufficient to deem JAMC Fung’s special employer.

2. No, because Aero’s snow removal contract did not create a duty of care to Fung, and Aero’s actions did not create or exacerbate a dangerous condition.

Court’s Reasoning

The Court reasoned that the Workers’ Compensation Law §§ 11 and 29 (6) generally bar an employee from suing their employer or co-employee for work-related injuries. However, this exclusivity does not automatically extend to third parties such as managing agents. Citing Thompson v. Grumman Aerospace Corp., 78 N.Y.2d 553 (1991), the court emphasized that a special employment relationship must exist, demonstrated by factors such as “who controls and directs the manner, details and ultimate result of the employee’s work.” The Court found no evidence of such a relationship between JAMC and Fung. The Court stated, “Thus, it is not the title of the purported ’employer’—in this case, a putative managing agent—that controls, but rather the actual working relationship between that party and the purported ’employee.’”

Regarding Aero, the Court cited Espinal v. Melville Snow Contrs., 98 N.Y.2d 136 (2002), reaffirming that a contractual obligation alone does not create tort liability to non-contracting third parties. The Court recognized three exceptions but found none applicable. The Court stated that “by merely plowing the snow, as required by the contract, defendant’s actions could not be said ‘to have created or exacerbated a dangerous condition’”. The Court noted that Aero had no contractual obligation to salt or sand the parking lot absent a request from JAMC, and there was no evidence of such a request.

More ARTICLES