Pegged by the National Council on Compensation Insurance as a top legal issue to watch, disputes over exclusive remedy in workers compensation will continue as more injured workers and surviving families sue employers, experts say.
In nearly every state workers compensation is considered the exclusive remedy for workplace injuries. The so-called grand bargain ensures workers’ injuries are managed and that they receive income benefits or families receive death benefits in the event of a workplace fatality. In return, workers largely give up their right to sue for damages.
However, many states also include a loophole: If an employer is found by the courts to have been grossly negligent, it may be subject to tort litigation. At least one state — Mississippi —introduced legislation this year clearing the red tape for such lawsuits.
“Court challenges to the constitutionality and scope of exclusive remedy — providing employer immunity from injured employee tort suits — continues to be a closely watched topic among WC stakeholders,” said Adam Levell, NCCI’s senior counsel in Boca Raton, Florida.
NCCI tracked several cases throughout 2022, naming exclusive remedy among the top five legal challenges in comp. The cases it highlighted in its February report showed mixed results.
Many of the arguments came down to interpretation of language in the statutes.
For example, the Supreme Court of Idaho, in Fulfer v. Sorrento Lactalis Inc., reversed an earlier summary judgment on the basis that exclusive remedy “does not apply when the employee’s injury is caused by the willful or unprovoked physical aggression of the employer,” according to NCCI’s analysis.
As example that upheld exclusive remedy, the Supreme Court of South Dakota, in Althoff v. Pro-Tec Roofing Inc., ruled a family could not sue an employer, clarifying “the intentional tort exception to workers compensation exclusive remedy, finding that employees who sue their employers for work-related injuries under the intentional tort exception must prove that it was substantially certain — and not virtually certain — that their injuries would occur as a result of the employer’s conduct,” NCCI reported.
“It’s a very, very active plaintiffs bar,” said Nathan Levy, Atlanta-based partner with Levy, Sibley, Foreman & Speir LLC, who added that in Georgia exclusive remedy has been upheld in most cases at the appellate and state Supreme Court levels. “Exclusive remedy really has remained intact; it has not been chipped away, and that is largely a good thing.”
Yet, such proceedings will likely continue, he added.
Bert Randall, principal at Franklin & Prokopik P.C. in Baltimore, said several issues are spurring the lawsuits.
“What I think we’re seeing in certain instances around the country are opportunities for plaintiffs counsels in the right cases to try to chip away at exclusive remedy and pursue a tort suit,” he said.
“One of the causes is the nuclear verdicts that we’re seeing nearly daily in various parts of the country. And I think that plaintiffs’ counsels are looking at certain cases where it might be worth the fight and take the chance to bypass exclusive remedy.”
At active Occupational Safety and Health Administration could also be a contributing factor, he said.
Under the Biden Administration, OSHA, which investigates serious and deadly workplace incidents, has been increasingly aggressive, legal experts say. If the agency fines an employer following an incident — regardless of whether a citation is contested — it could be the impetus for a lawsuit claiming negligence on behalf of the employer, Mr. Randall said.
“If there’s evidence of an OSHA violation, it would mean that their chances of recovery on a negligence theory likely go up; perhaps significantly up,” he said. “If they feel that they’ve got a fairly strong case on the negligence side, then the next question is, ‘okay, can we pierce the exclusivity provisions in this state statute to be able to get to that negligence needed in a case where damages are sufficient to make it worthwhile?’”