No Longer the Exclusive Remedy
The history of Workers' Compensation law is both interesting and varied. While most commentators trace its origins to Bismarck's Germany of the late 1800's, others have found early models of scheduled payments for loss of body parts among the pirates of the 13th century.
Regardless of when or where they began, workers' compensation laws have a common feature at their core; in exchange for compensating work related injuries regardless of fault, the employer receives an immunity from being sued at common law by its employees and in most cases by their spouse and dependents as well.
The 'exclusive remedy doctrine' by which this legal quid pro quo is referred has been gradually eroded by the creation of numerous exceptions or other causes of action which expose an employer to financial liability over and above its workers' compensation obligation.
Since workers' compensation laws vary from state to state and exist as well in federal, maritime and other jurisdictions this paper will take a broad overview of the more common areas where plaintiff/employees have additional causes of action against their employers. These areas of potential liability include:
- non-injury torts, i.e. harm to the persona, not the person. For example, defamation, false arrest, malicious prosecution and similar torts.
- where the employer occupies a dual capacity or dual persona position.
- administrative or statutory employment violations i.e. Family Medical Leave Act (FMLA); Americans with Disabilities Act (ADA); OSHA; Equal Employment Opportunity (EEOC) and state based discrimination actions, civil rights violations, state and federal and so forth.
- third party actions where the employer may be impleaded for indemnification or contribution..
- non-compensable medical conditions.
- leased employees.
- serious misconduct.
- bad faith claims handling.
Several Massachusetts cases illustrate the distinction between injury and non-injury causes of action.
Foley v. Polaroid Corp., 413 N.E. 2nd 711 (1980) involved the plaintiffs, Edward and Mary Foley, husband and wife. Edward was employed by Polaroid as a computer operator on the midnight shift. A female co-worker accused Edward of assaulting and raping her during work hours. He was tried and acquitted. The plaintiffs allege that Polaroid withheld information it had acquired during its private investigation and counseled employees not to testify on behalf of Edward at trial. The plaintiffs asserted that these actions caused Edward to be held up to ridicule and scorn and damaged his reputation. They further allege he suffered emotional and physical distress. Mary claimed that as a result she suffered damage to her marital relationship which resulted in a loss of consortium.
Polaroid moved to dismiss the action on the ground that the plaintiff's injuries are compensable under the mass. Workers' Compensation Act which proved an exclusive remedy.
The Massachusetts Supreme Judicial Court examined the various courses of action claimed by the Foleys.
- Intentional infliction of emotional distress-cause of action disallowed since Massachusetts case law grants a recovery under the workers' compensation law for emotional or psychiatric injuries arising out of and in the course of employment.
- Defamation-allowed because the general term "personal injury" does not encompass such things as injury to one's reputation resulting from libel or slander. The court held that an injury to reputation is not the type of personal injury contemplated by the Workers' Compensation Act. Workers' compensation encompasses physical and emotional injuries only.
- Malicious prosecution-allowed since the essence of this tort is not the physical or mental injury but the interference with the right to be free from unjustifiable litigation. The court also noted that certain other torts are not prohibited by the exclusive remedy provision' i.e. false imprisonment, invasion of right to privacy, alienation of affection, seduction, false arrest, etc.
- Violation of civil rights-allowed-as a violation of civil rights is not a personal injury or a hazard of employment.
- Loss of consortium-allowed since case law of the time allowed such an action. Note the Massachusetts legislature in l986 eliminated a spouse or family member's right to claim a loss of consortium.
Massachusetts had an opportunity to revisit these issues in the case of Doe v. Purity Supreme, 664 N.E. 2nd 815 (1996). Jane Doe, an employee of Purity Supreme Supermarkets, brought a l9 court civil complaint arising from an alleged rape
She (and her spouse) brought common law claims for negligence, assault and battery, false imprisonment, intentional and negligent infliction of emotional distress, and loss of consortium.
They also brought statutory claims under the Massachusetts Civil Rights Act, the Massachusetts Equal Rights Act and the Consumer Protection Act.
The court held that the plaintiffs' claims for negligence, assault and battery, intentional infliction of emotional distress and negligent infliction of emotional distress were barred by the exclusive remedy provision. The plaintiffs unsuccessfully argued that sexual assault from a public policy standpoint should require an exception to the exclusive remedy rule. The court cited courts in other jurisdictions who have concluded workers' compensation statutes would bar tort recovery for sexual assault and rape. (Colorado and Maine, for example).
The court also held that the state based civil rights claim was barred.
As to the false imprisonment claim, the court found that this claim was not barred by the exclusive remedy provision but the co-employee's employer, Purity Supreme was not vicariously liable as the co-worker's actions were outside the scope of his employment. A false imprisonment claim could exist as to the alleged assailant but not the employer. The exclusive remedy doctrine generally will not prevent an action for unjust termination if the employee can show he was discriminated against for bringing a workers' compensation claim.
Dual capacity or dual persona cases involve situations where the employer also, coincidentally is an independent negligent entity causing the injury.
In jurisdictions allowing recovery for dual capacity a manufacturer of a defective product may be liable even if its employee is injured using said product in the workplace. For example the employer manufactures a part that fails causing injury to its employee (or an employee of its subsidiary corporation) can the employer, as provider of the part be sued? The answer to this question depends on whether the particular jurisdiction recognizes the dual capacity doctrine. According to the American Law Firm Association (ALFA International) state by state analysis, 4th edition (l999), the following states recognize dual capacity liability: California, Illinois, Kansas, Kentucky, Michigan, Minnesota, Ohio. Those that do not include Indiana, Iowa, Missouri, Montana, Rhode Island, South Carolina, South Dakota, Tennessee, Washington and Massachusetts.
In l997 New Mexico case illustrates the issues involving the defense of exclusive remedy employer is one department of a state government and the negligent party is within another department of state government. In the case of Singhas v. New Mexico State Highway Dept., Supreme Court of New Mexico #23, 084 decided September 30, l997, the plaintiff, brought suit on behalf of his wife, an employee of the New Mexico Public Defenders Dept. who was killed in a traffic accident.
Plaintiff claimed the New Mexico State Highway Dept. was negligent.
Since the plaintiff was receiving surviving spouse benefits under the workers' compensation system, the defendant pleaded the exclusive remedy provisions of the New Mexico workers' compensation act.
The Supreme Court in New Mexico affirmed the denial of the tort remedy holding that the exclusive remedy provisions of the workers compensation act apply to cases like this where an employee of one state agency sues a tortfeaser of another state agency. They held as a matter of law that the state is the employer. The court cited Arthur Larson's Treatise, 6Larson.W.C. Law 72.85(b). The court held that the legislature intended that the State of New Mexico be considered the employer of all employers in its various "branches, agencies, departments, boards, instrumentalities, or institutions".
The plaintiffs argued that the "dual persona" doctrine applied which would provide an exception to the exclusive remedy rule.
Under the dual persona doctrine, an employer may become a third person vulnerable to a tort suit by an employee, if and only if the employer possesses a second persona completely independent from an unrelated to its status as an employer.
In Massachusetts in the case of Longever v. Revere Copper and Brass, Inc., the employee, Longever worked for a division of Revere Copper and Brass when a machine was allegedly defectively manufactures by one of Revere's other divisions, caused his injury. The Massachusetts court held that the two divisions nevertheless were part of the same legal person (Revere Copper and Brass) and the common law suit was dismissed. Usually dual capacity will not be found where the employer has separate divisions.
Other situations involve employees of doctors or hospitals who are victims of medical malpractice while treating for the work injury. See Dupree v. Shane, 241 P. 2nd 78 (1951) a California case since altered by statutory amendment. In jurisdictions which uphold the dual capacity doctrine a plaintiff/employee may recover in tort when the injury was caused by his employer acting as a healthcare provider and not the employer. Other dual capacity issues emanate from the role of the employer as also owner of land. See Sharp v.Gallagher, 447 N.E. 2nd 786 (1983) an Illinois case; or where the employer exists a governmental, city or county or state, entity with different departments or divisions. For example in Osborne v. Commonwealth of Kentucky, 353 S. W. 2nd 373 (1962), Osborne, a highway worker for the state, was not allowed to sue the Department of Public Safety when struck by an automobile driven by a state trooper.
The latter part of the last century brought about many other statutory areas of employer liability according workplace injuries may expose employers to liability under the ADA, or for violating provisions of the Family Medical Leave Act. Certainly safety violations may incur OSHA fines.
Title VII of the Civil Rights Act of l964 exposes to claims for back pay, front pay, reinstatement, attorney fees for discrimination. Many states have state based discrimination statutes so that many claims usually psychiatric in nature, resulting from sexual harassment in the workplace lead to both a compensation liability as well as sexual harassment claim.
Employers liable for workers' compensation may also face impleader in the employee's third party claim either on the theory of contribution or indemnification.
In Massachusetts, an employer cannot be brought in on a contribution theory since it is immune from suit by the employee and cannot be considered a joint tortfeaser. Equitable or indemnification is also prohibited, however express or implied contractual indemnification agreements are enforceable. See Liberty Mutual Ins. Co. v.Westerlind, 373 N.E 2nd 957 (1978).
On occasion workers' compensation statues are amended and certain personal injuries are excluded from coverage. Where an employer has no compensation liability it would seem there should be a tort liability. No so in Massachusetts.
In the case of Green v. Wyman-Gordan Co., 664 N.E. 2nd 808 (1996), plaintiff Green brought an action for among other things, negligent infliction of emotional distress as a result of a bona fide personnel action. Such a claim is barred by the Massachusetts workers' compensation statute. Nevertheless the high court held (at P.814) "it would strain….common sense to presume that the legislature chose to limit the employers' collective liability under the workers' compensation scheme, only to expose individual employers to greater liability in common law…..".
The opposite result occurred in Oregon.
In the case of Errand v. Cascade Steel Rolling Mills, 888 P. 2nd 544 (1995) the plaintiff was unable to collect workers' compensation benefits for a pre-existing condition in that the definition of compensable injury required that the work be the "major contributing cause" of the injury. Upon failing to secure workers' compensation, he sued his employer. In its holding on behalf of Errand the Oregon Supreme court held that the exclusive remedy provision protected an employer from liability only when the employer owed benefits under the act. See also Smothers v. Gresham Transfer, 23 P. 3rd 333.
A similar result occurred in the State of Washington where an employee was allowed to sue his employer for a disease not covered under "the basic provisions of the act". McCarthy v. DSHS, 759 P. 2nd 351 (1998).
There are interesting issues regarding a tort remedy for diseases contracted in the workplace but not covered by that jurisdiction's workers' compensation law. Once again there must be a state by state analysis.
For example, in Massachusetts G.L. C152 §1(7A) requires that for a communicable disease to be compensable, it is required that the disease be inherent in the employment.
Illinois also requires a compensable disease to arise from a "risk peculiar to or increased by the employment and not common to the general public". New York on the other hand permits recovery for "any occupational diseases".
Whether an employee can recover in tort for a non-compensable disease which may nevertheless have resulted from some negligent act in the employment setting will depend on how that particular jurisdiction treats this issue.
Also blurring the line between what is considered a workers compensation claim as opposed to a third party tort claim has to do with who is a "third party". The general rule is that statutory employer's potential responsibility for payment of workers compensation benefits is a sufficient "quid pro quo" to justify exclusive remedy protection.
This issue most often arises in the context of borrowed servants or temporary employees hired through labor brokers.
Many states address this issue through specific legislation. Massachusetts has Section 18 of Gen. Law. Chapter 152 which deals with the responsibility of paying compensation for general and special employers i.e. the provider of temporary labor as opposed to the recipient of the labor provided. Workers compensation immunity can be extended to the company who hires the temporary laborers if said company's named as an additional insured on the policy of workers' compensation insurance and if certain other factors are met. For the most part, Massachusetts and other jurisdictions provide that only the corporation paying for and providing workers' compensation enjoys the immunity from tort and liability. Complicating these cases are contractual agreements between the general employer and the special employer such as hold harmless or indemnification language. One must look at the particular jurisdiction in which the injury occurs and see how the legislature has dealt with the distinction between the general and special employer.
In North Dakota in the case of Cervantes v. Drayton Foods, L.L.C., decided in l998 involved such a case. Cervantes was employed by a temporary labor company and was injured while working for his employer's client, Drayton Foods.
The Supreme Court in North Dakota held that since Drayton Foods did not directly pay workers compensation premiums for the claimant, it is not a contributing employer statutorily immune from suit.
Intentional misconduct of the employer may give rise to added benefits under a state's workers' compensation statute or may expose the employer to a separate cause of action.
In Massachusetts Section 28 of the compensation statute doubles all benefits where the injury was caused by the employer's "serious and willful misconduct".
In Arkansas, for example, an employee may elect a tort remedy in such an instance. In Connecticut an employee may be able to overcome an exclusivity defense if he can establish an intentional tort claim, Suarez v. Dickmont, 242 Conn. 255 (1997). Each individual jurisdiction will have its own body of law on this issue.
Another class of cases deals with bad faith or unfair claims handling practices. Massachusetts will not recognize a separate cause of action but in other jurisdictions such a right might exist.
It is important to determine whether in a particular jurisdiction the insurance carrier is considered to be sufficiently identified with the employer to be granted immunity from suit. Statutory phrasing or court precedent must be researched in each instance. In Wisconsin, for example, compensation is the exclusive remedy against "the employer and the workers' compensation insurance carrier: Wis. Stat. Ann §102.03(22).
It is clear that the simplistic notion that once an employer provides for the payment of workers' compensation its potential financial obligation to its employee is satisfied no longer holds true. Tort law is in a constant state of evolution. Creative lawyering and a growing awareness of all the economic effects of a job related injury has led to the creation of additional causes of action and remedies not contemplated when workers' compensation laws were originally enacted.